My issue with ideas like the "startup visa" is that they require restrictions and bureaucracies. You end up with more draconian restrictions on immigrants causing resentment. You end up with more distortion of market signals.
What happens when a startup goes under? Visa cancelled? Well that's reason to pour more resources in or just pretend it's still alive. What happens if they do some consulting on the side to stay alive? What happens if it ends up all consulting? What happens if people come out with the intention of doing this. How are you going to stop it? Force them to develop products?
What is a startup? Does a lawn mowing startup count? How about if they invent their own lawn mower? in 'The Founder Visa,' Graham proposes that the Governemnt could "use investment by recognized startup investors as the test of whether a company was a real startup." Recognised by who? Do you really want to erect an official barrier to entry for investors?
What about an existing startup in country X that wouldn't mind moving to the US. Now they need an officially recognised investor. They don't need an investor. They need a visa. They can pay for it. The investor is in a position to sell a visa, even if it looks like he is just getting a good deal on some stock. It might even look like that to the investor. I offered a deal. They took it. The power to grant a visa is worth money and even if you can control the granter's morals or incentives (you can't), you cannot control the grantee's reasons for accepting a deal.
4 consultants doing remote work for mostly US clients decide they could double their (say $150k p/a) revenue by moving to the US and doing the same. Theoretically, they can afford up to $150k p/a for the visa. Say they take $100k "investment" form a recognised investor in return for a promise to pay $50k p/a. How would the visa process weed these candidates out. Review the business plan? Make sure that they are planning to build a business that scales? Consulting doesn't scale. Are you sure? Will we have a list of business plans that scale?
The article mentions setting up "a board of investors, entrepreneurs, and tech lawyers who are used to vetting tech ideas; they'd review applications and choose which ones are worthy of a Founder Visa." This, it reckons, would be open to corruption.
I don't think it is possible to have "controlled immigration" that is this controlled to this extent without these ugly issues.
I agree with you to a certain extent and would have upvoted if rather than pointing out all the ways of gaming it, you could have at least mentioned 1 way of solving the problem.
I agree that people will be gaming the system. There is no policy which cannot be gamed, but we have to look at the bigger picture. How many VCs do you think will put their reputation at risk to earn $50k pa? I am not saying the solution the author mentioned is perfect, but its a start. A system can be put in place similar to O1 or EB1 visa but with startups in mind. Every startup will have to go through certain conditions to be eligible to apply. The founders can have 1-2 year temporary visa and if things work out great, they should be granted Green card, or they should be allowed to go through the cycle again.
Without getting into a very detailed discussion, let me put it this way. I think a convoluted system is the price of such a system. It boils down to the need to define startup. This is something we are better off not doing. Once you give startups special rights of some sort, companies & people have an incentive to be 'startups' rather than just companies. People might have an incentive to be startups rather than professionals. This is the kind of distortion I was talking about.
I think that attempts to minimise distortions by not letting them come into play in the market is closing loopholes. They are usually problematic in themselves.
The ideas posed by pg & this article are that the small issue of defining startup can be easily worked around by piggybacking on the implicit definition of startup used by investors. Either ask them (panel) or use their investment as a qualifier. My criticism of the latter approach is that you can't just assume that investors' actions will be uninfluenced by their newfound superpower. It will allow them to get better terms, for example. It may allow them to get the deal in the first place.You hear of cases startups want an investor primarily for the contacts and advice, rather than capital. I could easily imagine the visa being the primary reason. Since being a 'recognized investor' is such an advantageous position, others will want to do this too. Are YC type organizations more likely to be recognized? If so then this distorts the market in favour of them. YC will become an immigration path (like study is).
The panel approach is also problematic. You are creating a bureaucratic gatekeeper. These tend to be the worst kind. First, the panel decides if a startup is worthwhile. then, the market gets its turn.
My pick out of the two would be a panel. It avoids the need to have recognized investors, only recognized startups. But apart from corruption, expect to have decisions made by bureaucracies before the market gets a crack.
Barriers to immigration are like barriers to trade. Barriers this high in trade would be under incredible pressure.
*I have no problem with immigration. I am not American or in America. i am an immigrant myself (in Australia). My preferred long term solution would be lowering or even removing barriers to immigration completely by some point.
Quite a few people have mentioned Canada's skills-based system. This sounds far and away better and clearer than the unmanageable "Founder's Visa".
BUT REGARDLESS, America will not be "The World's Tech Leader" with American elementary and secondary schools in the shape that they presently are in (and more multiple choice testing isn't it either..). Funny how this never gets mentioned in these "Tech Leader" debates (cultural math phobia might even deserve being addressed here).
Having been on the receiving end of Canada's 'skills based system' I can testify that it is less than perfect, to put it very mildly.
After waiting for five years for paperwork to come through we packed up and moved back to the Netherlands, I could simply not justify having my child in school with a potential culture change in case our application would get denied in the middle of his secondary education.
The Canadian system is on paper very entrepreneur friendly but in practice a lot less so.
For maximum irony, after they figured out that we really did move back to Europe and took our investment with us (as far as that was possible, some of the real estate is still up for sale even today) we got our papers within a couple of weeks. So, after we left it was no problem to give us our status, but as long as we were there there wasn't any way to get the process unstuck.
Total frustration. If you plan on moving to Canada, make sure you get your paperwork BEFORE you start anything or make any investments, no matter what the local, provincial or federal government promises you that they will do, once your negotiation position is hollowed out by your investment or move their incentive to give you any status disappears.
And make sure you apply for health care within 30 days of moving there, otherwise you are in for a world of trouble.
joe_the_user says:
"America will not be 'The World's Tech Leader' with American elementary and secondary schools in the shape that they presently are in"
Unconvincing.
Despite the current state of affairs in elementary/secondary schooling the US graduates more Ph.D.'s in most fields than can find suitable jobs Excluding occasional shortages there are more than enough excellent students in the US education pipeline to more than fill all advanced degree job openings in the US.
Comments
My issue with ideas like the "startup visa" is that they require restrictions and bureaucracies. You end up with more draconian restrictions on immigrants causing resentment. You end up with more distortion of market signals.
What happens when a startup goes under? Visa cancelled? Well that's reason to pour more resources in or just pretend it's still alive. What happens if they do some consulting on the side to stay alive? What happens if it ends up all consulting? What happens if people come out with the intention of doing this. How are you going to stop it? Force them to develop products?
What is a startup? Does a lawn mowing startup count? How about if they invent their own lawn mower? in 'The Founder Visa,' Graham proposes that the Governemnt could "use investment by recognized startup investors as the test of whether a company was a real startup." Recognised by who? Do you really want to erect an official barrier to entry for investors?
What about an existing startup in country X that wouldn't mind moving to the US. Now they need an officially recognised investor. They don't need an investor. They need a visa. They can pay for it. The investor is in a position to sell a visa, even if it looks like he is just getting a good deal on some stock. It might even look like that to the investor. I offered a deal. They took it. The power to grant a visa is worth money and even if you can control the granter's morals or incentives (you can't), you cannot control the grantee's reasons for accepting a deal.
4 consultants doing remote work for mostly US clients decide they could double their (say $150k p/a) revenue by moving to the US and doing the same. Theoretically, they can afford up to $150k p/a for the visa. Say they take $100k "investment" form a recognised investor in return for a promise to pay $50k p/a. How would the visa process weed these candidates out. Review the business plan? Make sure that they are planning to build a business that scales? Consulting doesn't scale. Are you sure? Will we have a list of business plans that scale?
The article mentions setting up "a board of investors, entrepreneurs, and tech lawyers who are used to vetting tech ideas; they'd review applications and choose which ones are worthy of a Founder Visa." This, it reckons, would be open to corruption.
I don't think it is possible to have "controlled immigration" that is this controlled to this extent without these ugly issues.
I agree with you to a certain extent and would have upvoted if rather than pointing out all the ways of gaming it, you could have at least mentioned 1 way of solving the problem.
I agree that people will be gaming the system. There is no policy which cannot be gamed, but we have to look at the bigger picture. How many VCs do you think will put their reputation at risk to earn $50k pa? I am not saying the solution the author mentioned is perfect, but its a start. A system can be put in place similar to O1 or EB1 visa but with startups in mind. Every startup will have to go through certain conditions to be eligible to apply. The founders can have 1-2 year temporary visa and if things work out great, they should be granted Green card, or they should be allowed to go through the cycle again.
Without getting into a very detailed discussion, let me put it this way. I think a convoluted system is the price of such a system. It boils down to the need to define startup. This is something we are better off not doing. Once you give startups special rights of some sort, companies & people have an incentive to be 'startups' rather than just companies. People might have an incentive to be startups rather than professionals. This is the kind of distortion I was talking about.
I think that attempts to minimise distortions by not letting them come into play in the market is closing loopholes. They are usually problematic in themselves.
The ideas posed by pg & this article are that the small issue of defining startup can be easily worked around by piggybacking on the implicit definition of startup used by investors. Either ask them (panel) or use their investment as a qualifier. My criticism of the latter approach is that you can't just assume that investors' actions will be uninfluenced by their newfound superpower. It will allow them to get better terms, for example. It may allow them to get the deal in the first place.You hear of cases startups want an investor primarily for the contacts and advice, rather than capital. I could easily imagine the visa being the primary reason. Since being a 'recognized investor' is such an advantageous position, others will want to do this too. Are YC type organizations more likely to be recognized? If so then this distorts the market in favour of them. YC will become an immigration path (like study is).
The panel approach is also problematic. You are creating a bureaucratic gatekeeper. These tend to be the worst kind. First, the panel decides if a startup is worthwhile. then, the market gets its turn.
My pick out of the two would be a panel. It avoids the need to have recognized investors, only recognized startups. But apart from corruption, expect to have decisions made by bureaucracies before the market gets a crack.
Barriers to immigration are like barriers to trade. Barriers this high in trade would be under incredible pressure.
*I have no problem with immigration. I am not American or in America. i am an immigrant myself (in Australia). My preferred long term solution would be lowering or even removing barriers to immigration completely by some point.
Quite a few people have mentioned Canada's skills-based system. This sounds far and away better and clearer than the unmanageable "Founder's Visa".
BUT REGARDLESS, America will not be "The World's Tech Leader" with American elementary and secondary schools in the shape that they presently are in (and more multiple choice testing isn't it either..). Funny how this never gets mentioned in these "Tech Leader" debates (cultural math phobia might even deserve being addressed here).
Having been on the receiving end of Canada's 'skills based system' I can testify that it is less than perfect, to put it very mildly.
After waiting for five years for paperwork to come through we packed up and moved back to the Netherlands, I could simply not justify having my child in school with a potential culture change in case our application would get denied in the middle of his secondary education.
The Canadian system is on paper very entrepreneur friendly but in practice a lot less so.
For maximum irony, after they figured out that we really did move back to Europe and took our investment with us (as far as that was possible, some of the real estate is still up for sale even today) we got our papers within a couple of weeks. So, after we left it was no problem to give us our status, but as long as we were there there wasn't any way to get the process unstuck.
Total frustration. If you plan on moving to Canada, make sure you get your paperwork BEFORE you start anything or make any investments, no matter what the local, provincial or federal government promises you that they will do, once your negotiation position is hollowed out by your investment or move their incentive to give you any status disappears.
And make sure you apply for health care within 30 days of moving there, otherwise you are in for a world of trouble.
joe_the_user says: "America will not be 'The World's Tech Leader' with American elementary and secondary schools in the shape that they presently are in"
Unconvincing.
Despite the current state of affairs in elementary/secondary schooling the US graduates more Ph.D.'s in most fields than can find suitable jobs Excluding occasional shortages there are more than enough excellent students in the US education pipeline to more than fill all advanced degree job openings in the US.
How many of those PhDs went to elementary & secondary education in the US?
Uh, did you even notice that PhDs still go to elementary school?