VCs Push StartUp Visa Act

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Bill's Prospects

Getting the bill passed is not a foregone conclusion, says Demetrios Papademetriou, president of the Washington think tank Migration Policy Institute. "Introducing a bill into the U.S. Congress is the easiest thing to do," he says. "Getting it to see the light of day is the hardest."

Critics of immigration reform are likely to point out potential loopholes in the new bill that might grant citizenship to immigrants who are not successful entrepreneurs. Kim Berry, head of the IT trade group Programmers Guild, questions what will happen to EB-6 visa holders whose businesses fail. "The entrepreneur is permitted to remain in the country even if the terms are not met and the venture fails" except under limited circumstances, Berry says. The Programmers Guild does not have lobbyists in Washington and is "not opposed to the concept," Berry says. "We're opposed to the loopholes."

How much the U.S. economy could benefit from StartUp Visas is also a matter of debate. Proponents say it could attract thousands of new startups in a few years, and tens of thousands of jobs. Ron Hira, professor of public policy at the Rochester Institute of Technology, says the backers of the StartUp Visa have not done enough research to show that there is widespread demand for it.

Another point of contention is whether the bill would force U.S. entrepreneurs to compete with foreigners for essentially the same pool of funds. Last year, venture capitalists invested $17.7 billion in U.S. firms, according to data compiled by the National Venture Capital Assn. and PricewaterhouseCoopers, from a peak of $100.5 billion in 2000. Kerry and VCs say the StartUp Visa would help add to—rather than take from—this total. "I'm sure it would increase" the total VC investments, says Ron Conway, an early investor in Google (GOOG) and PayPal who now runs the SV Angel fund. Kerry agrees: "Once the program catches on, we expect that it would lead to the funding of more startup businesses here than would be the case without it."

Douglas MacMillan is a staff writer for Bloomberg BusinessWeek in New York.

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