Founder Insight gives you feedback from the startup trenches.
In this post by Silicon Valley grad, Mike Galarza (CEO, Entryless), Mike addresses the flaws of the US immigration system, and shares the story of how he managed to get his visa to launch a startup in the US .
"I’ve always been a problem solver.
From the time I was a university student in Mexico, and later working in finance and accounting in San Francisco’s Bay Area, I looked for challenges that demanded big solutions. That desire grew into the dream of solving a daily problem that led to the founding of a tech startup. I always thought the hardest part would be actually building the company up from nothing. That was before I encountered the US’s complex and rigid immigration system.
Immigrant entrepreneurs are like steroids for GDP growth. We infuse the economy with foreign investment dollars that would otherwise be lost. Our businesses increase domestic demand for everything from technology resources to communications services. This business activity helps create jobs and tax revenue. Unfortunately, comprehensive immigration reform appears to be a political impossibility. For all of the contentious debate about immigration, we lose sight of stories about real people trying to enter the country legally. When the immigration process becomes more about enduring the frustration of inefficient bureaucracy than meeting an established set of criteria, something is wrong.
To realize my own dreams, I had to solve the immigration puzzle for myself. My non-immigrant NAFTA Professional visa presented the first obstacle: Immigration law prohibited me from simply quitting my salaried job as a finance manager for a large manufacturing company to found a startup. I first had to request a legal status change to E2 classification from the US Citizenship and Immigration Services. The E2 would allow me to remain inside of the US and work, with control of an initial investment of at least $100,000. After a lengthy application process, I secured this new classification, but I could not travel between the US and Mexico, or anywhere else outside of the US.
Next, I had to navigate the E2 investor visa process at the US Embassy in Mexico, or I would’ve been relegated to remain outside of the US. I needed to get an approval from the Department of State at the US Embassy in Mexico to be accepted as a legal immigrant and to continue to build my tech startup, to invest more capital without the risk of being kicked out, and to provide certainty to US job applicants that I could start hiring in the US. I also needed operate Entryless’s R&D center, which was based in Mexico—a decision that was made given my tenuous immigration status.
In order to operate in both the US and Mexico, I needed to make my case in each country. At one point, just hours before a crucial meeting with US officials from the Embassy in Mexico, I discovered they had lost all of the documentation I had previously provided. At this point I could not re-enter the US because when I left the country, I instantly lost the legal status given by the US Citizenship and Immigration Services, and was now relying on the consul decision at the US Embassy in Mexico.
If the process in Mexico failed, my startup was likely doomed. Fortunately, I was prepared for the bureaucratic shortcomings. I provided replacements for all lost documentation on the spot and kept the process moving forward. The overall sum of events—the approval by immigration services, presenting my case to the embassy, getting proof of intellectual property development, building a team and getting traction in Silicon Valley—helped me make a compelling case for my tech startup Entryless, which offers a network for accounts payable automation to organizations burdened by manual accounting practices. With the immigration problem ever apparent, I could not operate Entryless’s R&D center from the US, rather it had to be from Mexico.
Now with the stability provided by the visa, we’re in the process of moving our R&D center to the US so that we can create jobs to help us accelerate and bring to market our solution to help US companies save up to 87% in time while doing their accounting. The entire process took a year and was likely bolstered by the fact that I was already in the US, had a social security number, and a corporation that was already underway in the US.
How many other fully-funded entrepreneurs remain locked out of the US economy because of a broken system? Kauffman Foundation estimates with the introduction of a startup visa could help generate 1.6 million US jobs over the next 10 years.
Perhaps instead of focusing on divisive debate about illegal immigration—we would be better served fixing the problems facing those legal immigrants who want to bring business and technology innovation to this country. If we accept the Congressional Budget Office (CBO) estimates (pdf), the stalled Immigration Reform bill could grow the economy by $1.4 trillion dollars or 5.4% of GDP in 2033 and reduce the federal deficit by $850 billion dollars over the next 20 years. Further, multicultural business leaders are better able to draw analogies between geographical markets, anticipate cross-cultural conflicts, and interpret complex knowledge across cultures. Let us look at amending specific immigration rules or streamlining visa application protocols.
Paul Graham suggested back in 2009 that we create a visa specific for entrepreneurs. A provision for this type of visa was included in the 2013 immigration reform bill. While that legislation currently languishes in the House of Representatives, we should ask our political leaders to carve out a smaller bill that makes it easier for foreign born entrepreneurs to create companies in the US. A new bill could include language already drafted for the existing legislation—make it narrowly focused to enable only qualified entrepreneurs or investors to accelerate the immigration process:
“(i) a qualified venture capitalist, a qualified super angel investor, … or such other entity or set of investors, as determined by the Secretary, has devoted a qualified investment of not less than $100,000 to the alien’s United States business entity;…”
If a foreign entrepreneur can attract that level of investment to start an operation in this country, we should make it easier for her to do so. Hardworking immigrants must speak up, tell their stories, and push for a better immigration system so we can get to the real formidable challenge: creating and running a successful business."
You can follow Mike on Twitter at @_MikeGalarza. Quartz welcome your comments at email@example.com.