Senator John Kerry is leading the way on the (much discussed in tech and startup circles) Startup Visa Act of 2011 legislation. This legislation is aimed to help immigrant entrepreneurs secure visas to the United States so they can continue to build innovative businesses here.
Today Senator Kerry, Senator Richard Lugar (R-Ind.), Senator Mark Udall (D-Colo.), and the Chairman and Ranking Member of the Senate Foreign Relations Committee reintroduced the Kerry-Lugar-Udall Visa Bill in Washington D.C. Known as the StartUp Visa Act of 2011, this legislation allows immigrant entrepreneurs to receive a 2 year visa if they can show that a qualified U.S. investor is willing to invest in their venture. According to language in the press release from Senator Kerry, “In an expansion from the Kerry-Lugar StartUp Visa Act of 2010, the pool of eligible immigrants would now include holders of H-1B visas and entrepreneurs living outside the United States with a market presence in the country.”
Senator Kerry is quoted speaking to the need and impact of this bill: “Every job-creating American business started as an idea in the mind of an entrepreneur. We need to keep and bring more of those ideas to our shores where they can put Americans to work. Global competition for talent and investment grows more intense daily and the United States must step up or be left behind. Everywhere Dick Lugar and I travel for the Foreign Relations Committee, we see firsthand the entrepreneurial spirit driving the economies of our competitors. Creating a new magnet for innovations and innovators to come to the United States and create jobs here will offer our economy a double shot in the arm – robust job creation at home and reaffirmation that we’re the world’s best place to do business.”
Curious about differences in the StartUp Visa Act of 2010 and 2011? Brad Feld, a VC from Foundry Group, broke it down nicely on his blog here.
And below is exactly what the StartUp Visa Act of 2011 will do for entrepreneurs, taken from Senator Kerry’s release:
Options for Entrepreneurs
The StartUp Visa Act of 2011 would amend immigration law to give immigrant entrepreneurs three new options for entry or retention of residency:
Option One: Immigrant entrepreneurs living outside the U.S. would be eligible to apply for a StartUp Visa if a qualified U.S. investor agrees to financially sponsor their entrepreneurial venture with a minimum investment of $100,000. After two years, their business must have created 5 new jobs and raised not less than $500,000 in additional capital investment or generate not less than $500,000 in revenue.
Option Two: Immigrant entrepreneurs currently in the U.S. on an unexpired H-1B visa; OR immigrant entrepreneurs currently in the U.S. who have completed a graduate level degree in science, technology, engineering, math, computer science, or other relevant academic discipline from an accredited United States college, university, or other institution of higher education would be eligible for a StartUp Visa if;
They demonstrate annual income of not less than roughly $30,000 or the possession of assets of not less than roughly $60,000; and
Have proven that a qualified U.S. investor agrees to financially back their entrepreneurial venture with a minimum investment of $20,000.
After two years, their business must have created 3 new jobs and raised not less than $100,000 in additional capital investment or generate not less than $100,000 in revenue.
Option Three: Immigrant entrepreneurs living outside the U.S. would be eligible to apply for a StartUp Visa if they have controlling interest of a company in a foreign country that has generated, during the most recent 12-month period, not less than $100,000 in revenue from sales in the U.S.
After two years, their business must have created 3 new jobs and raised not less than $100,000 in additional capital investment or generate not less than $100,000 in revenue.
Better Utilizing Existing Visas
To accommodate this new type of visa, adjustments would be made to the existing EB-5 visa – which grants visas to foreign nationals who invest $1 million towards the creation of 10 jobs. Under a new EB-6 category, a visa would be granted to the innovative entrepreneur with intellectual capital, instead of a wealthy foreign investor who is in a position to buy a visa. The legislation transfers an allotment of the yearly 9,940 EB-5 visas, of which only 4,191 visas were used in FY 2009, to be granted under the new EB-6 category. The creation of new visas is not authorized in this bill.
Preventing Fraud and Abuse
The investor(s) eligible to “sponsor” immigrant entrepreneurs must be based in the U.S. – with the majority of partners being U.S. citizens – and have made $10 million capital commitments over the course of 2 years, with at least four investments exceeding $500,000 as stipulated in applicable SEC investor rules.
