Sunday, September 20, 2009

The Founder Visa Ignores Immigration Reality

My fearless readers are, no doubt, already familiar with the fact that I'm an American born and bred, but transplanted here to blighty to face my future amongst the whinging poms. I feel, based on my Silicon Valley-meets-London personal experience, I have something to add to the "Founder Visa" debate.

The notion of a "Founder Visa", originally coined by Paul Graham, has spread far and wide: Brad Feld, Slate, Eric Ries and a whole wave of twitches picked up the meme. The basic idea is that you'd get a visa to go and live in the US if you founded a new venture-backed company in the US. It sounds so simple a policy prescription that it must be a fantastic idea!

Exasperated Sigh

In Which Our Hero Visits Locations Unknown

I didn't move to the UK because I was a huge fan of the weather, or the food [1], or the transportation [2], or the dentistry. I moved here for immigration reasons.

When people ask me why in the world I left San Francisco to move to England, the typical answer I give is "family reasons." Which is true, but not incredibly descriptive. I think it's time to give a fuller story, and in the process out myself. [3]

When I moved here I was in a long term relationship with a British citizen. He had moved to the US with an L-1E-1 Treaty Trader visa [4], and was hoping, nay praying, that this could be upgraded to an H1-B. Unfortunately, although he was an extremely experienced financial software pre-sales consultant, with a BS from a quite reasonable UK university, and paid quite significant taxes for precious little in return, this wasn't going to happen. We lived for several years under the threat that if his firm decided to let him go for whatever reason, he had two weeks to leave the country forever. Given that his firm wasn't doing particularly well at the time, this put a major strain on his life, and thus our relationship.

After New Labour was elected here in the UK, one of their first actions on taking power was to rationalize gay immigration rights. Essentially, they said that if you were in a same-sex domestic partnership akin to marriage, that would be considered as though you were married for immigration purposes. Thus, I was able to move to the United Kingdom based on our relationship [5]; the converse was not true. We didn't have the option to get married in the US or the UK, and even if California had same-sex marriage at the time, it didn't matter for immigration purposes. [6]

So I gave up a career in Silicon Valley, where I had already been a founder of one firm, and worked in senior technical roles in several others. No doubt I would have started at least one firm in the Valley since then. I was a net win for the US in every single respect: I paid a lot of tax, I didn't use very many services, and I created a lot of high-tech jobs. The US lost me because certain Americans view my sexual orientation as, well, wrong.

Recently, I've started a venture-backed technology startup in London. Even though we've only been incorporated one month, I'm already benefiting the local economy and tax base. I'm creating jobs, hiring service providers who employ local staff, and spending money that creates jobs out of work. I pay personal taxes, and pay corporate taxes that help raise the tax base of the country as a whole. From a purely economic perspective, it's absurd to alienate someone like me from the US, but that's precisely what's happened. I don't plan to move back anytime soon. [7]

In Which Immigration Policy Becomes A Morass

Fundamentally, US immigration policy is a complete nightmare. All the vested interests, all the religious/social/conservative arguments, all the animosity, it's all a nightmare. And it's much more the third-rail of US politics than even health care or social security. Even though the Shrub had massive majorities in both houses of congress, he still couldn't push through even the most minor (to me) immigration reforms. What hope do a bunch of VCs have?

The UK, Canada, and Australia have solved this in a very clean way. They take a person, weigh them up on purely objective criteria, and determine whether the country believes that they will be a net-win to the country; if so, they get in. The UK calls this the Highly Skilled Worker program; Australia calls it the General Skills Migrant program. Why can't the US do the same thing?

Because when I hear about things like a Founder Visa program, what I really hear is a general denunciation of US immigration policies and procedures. What I really hear is "We can't hire the people that are necessary for the industries that are important to the country, and we're picking the edge case that we understand the most." That's not good enough. The edge case isn't the problem, the system is the problem.

In Which VCs Run A Chocolate Factory

Let's say that we had a Founders Visa. Let's say that we had this single exception to the insane US immigration policy morass. Here's my worry from a policy perspective: it changes the power dynamic for early stage investment with a non-American founding team so drastically it disturbs me. Top-tier VCs I'm not worried about; it's the less scrupulous sources of money that trouble me. [8]

Right now you have a power dynamic that, in general, involves equity investment by a risk capital firm in a firm founded by one or more entrepreneurs. Now let's say that in the middle of those discussions, you also had the dynamic where an offer of funding would also change the founder(s) immigration rights dramatically. Don't you think that would be detrimental?

Because I could easily see situations where bad sources of capital would essentially give a term sheet, wait until near closing and the founder(s) had started to make plans on living in the US, and then change the parameters of the deal in the docs stage. Because if you've already taken a lease on a home, started moving your stuff, started thinking you're going to live there, what's a few extra percent off the top if it preserves your visa?

Personally, I'm against the Founders Visa because it conflates immigration policy with risk capital investment. I'm in favor of rationalizing US immigration policy because it's the right thing to do.

Epilogue

If you start thinking that you can address US immigration policy without addressing my personal reasons for emigrating, think again. You have to reform the system as a whole, and you have to convince Americans in places that don't have a startup scene that immigration of people Not Like Them can be good for the country. If you don't start from first principles, you're doomed to failure.

I was forced to leave the US because there are people in the US who believe that the country would be better off without me, and those people have legislative power. I accept that, and it's why I'm not planning on moving back. Unless you manage to convince those same people that your plans to allow immigration are better for the country, and for them, you'll never succeed.

I wish you all the best of luck. I won't help you, because I think you're targeting an edge case but disregarding the fundamental iniquities in immigration policy. Furthermore, your policies wouldn't have kept me in the Bay Area, and I'm still bitter.

However, if you manage to fix things, I might just move back to Silicon Valley for the next startup.

Footnotes

[1]: I kid, I kid. Seriously, the food in London is fantastic, if you can afford to dine at the fantastic restaurants.
[2]: My commute in the San Francisco bay area: 45 miles; 45 minutes. My commute in London: 5.5 miles; 45 minutes. Then again, I've never been allowed to drive here, and I've never missed it, so it's a mixed bag.
[3]: I've been careful to never allow my sexuality to enter my public persona. I feel strongly enough about this matter, and it has affected my life so personally, I can't remain silent about it.
[4]: You've likely never met someone with this visa; it's exclusively for sales professionals of a foreign firm selling into the US, and nothing to do with the more common L-1 for consulting purposes.
[5]: The fact that I was obviously a net tax win for the UK made the application a formality, but it wasn't part of the official evaluation at the consulate.
[6]: People seem to forget about immigration in the US state-by-state same-sex marriage debate. It's a pure federal matter, so as long as DOMA is in effect, single-state same-sex marriage doesn't affect immigration rights.
[7]: I don't plan to ever move back as long as the official stance of the US government is that I am a lesser citizen by virtue of my sexual orientation.
[8]: And don't pretend they're not around. We all know that for every Accel, every Benchmark, every Index and KPCB and Red Point and Sequoia, there at least 2 firms that prey on entrepreneurs.
Updates since original posting:
I was corrected in the type of visa my partner had. It was an E-1 Treaty Trader, not an L-1 as I originally said.
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