Paul Graham steps out of tech sector to write on US immigration

Paul Graham, well known for his essays on start-ups and entrepreneurialism in the US tech sector wrote about an idea that if realized, would be a big step in the right direction for US immigration policy.

Paul’s  ‘Founder visa’ essay proposes that 10,000 entrepreneurial immigrants be granted US visas with conditions attached that they must not work for any other company apart from the one that they start-up while in the US.

Paul argues that for Silicon Valley to remain the best place in the world to start a software company more highly talented entrepreneurial immigrants are needed.  Some of the most successful Internet companies were started by US immigrants.  Examples include Jerry Yang, the founder of Yahoo!, who was born in Taipei.  Sergery Brin, the co-founder of Google immigrated to the US from Russia.  What is surprising to many is that these are not unusual cases (at least not for their foreign-founders). Approximately one quarter of US tech companies are founded by immigrants.

At the moment, requirements for investors and entrepreneurs to enter the US are high and the process of obtaining the visa is a lengthy process and it is not guaranteed to end in success.

The theoretical ‘Founder visa’ is a simple solution to a complicated problem.  Paul’s essay made quite a stir when it was published and it has been made famous online, to the extent of a Founder visa movement being created.

However, there are problems with the idea when you dig into it.  For example, how can foreign entrepreneurs prove they are serious about their business?  One solution would be for the US government to “piggyback” on the expertise of venture capitalists.  In other words, if a start-up founder has gained VC investment they can be allowed in – providing they still own a big enough share of their company.

This solution raises a new question – what about entrepreneurs looking to ‘bootstrap’ their business? (Grow it on-the-cheap with minimum capital investment).  Just as importantly there is the issue of how failure can be dealt with.  Most start-ups fail, so where would the failed founders go?  This could be solved by having the ‘Founder visa’ expire if the holder doesn’t start a new company with 1 year.

The typical xenophobic knee-jerk response of the US is not justified here.  Immigrants with a ‘Founder visa’ would be creating jobs for Americans, and if their companies are successful they could create a lot of jobs.

10,000 immigrants per year is a drop in the ocean in terms of people moving to the US.  If we use Paul’s estimate of 4 entrepreneurs per start-up then 2500 new companies would be started in the US every year.  Some of those companies would be successful; a few would be very successful and provide lots of jobs and taxable profits for the US.

What do you think about the concept of a ‘Founder visa’?