People both within USA and outside are pinning their entrepreneurial hopes on the passage of a bill, sponsored by Senators John Kerry and Richard Lugar, to create a Startup Visa. There has been tremendous debate and discussions on the same. Technically, it's a policy change around the EB-5 Visa which enables investors from other countries to get a visa in exchange for starting a business in the US with $1M in capital (or $500K for economically targeted areas) & the creation of at least 10 US jobs.
The change proposed is as follows:
Under the proposed legislation, instead of the visa going to an investor, a startup company founder or entrepreneur who receives a minimum equity investment of $250,000 could qualify as an EB-5 visa recipient. At least $100,000 would have to come from a sponsoring US investing entity.
But is that enough? Professor Vivek Wadhwa, associated with UC-Berkley, Duke University and Harvard Law School, in his article at TechCrunch proposed a few changes in his article How to Fix the Flawed Startup Visa Act.
Professor Wadhwa is glad to inform about the email that he received from Garrett Johnson, who works for Senator Richard Lugar (R-Ind.). In his subsequent writeup Finally, a Startup Visa That Works, he states that the updated proposal is as follows:
- Entrepreneurs living outside the U.S. - if a U.S. investor agrees to financially sponsor their entrepreneurial venture with a minimum investment of $100,000. Two years later, the startup must have created five new American jobs and either have raised over $500,000 in financing or be generating more than $500,000 in yearly revenue.
- Workers on an H-1B visa, or graduates from U.S. universities in science, technology, engineering, mathematics, or computer science—if they have an annual income of at least $30,000 or assets of at least $60,000 and have had a U.S. investor commit investment of at least $20,000 in their venture. Two years later, the startup must have created three new American jobs and either have raised over $100,000 in financing or be generating more than $100,000 in yearly revenue.
- Foreign entrepreneurs whose business has generated at least $100,000 in sales from the U.S. Two years later, the startup must have created three new American jobs and either have raised over $100,000 in financing or be generating more than $100,000 in yearly revenue.
Note: The investor must be a qualified venture capitalist, a “super angel” (U.S. citizen who has made at least two equity investments of at least $50,000 every year for the previous three years), or a qualified government entity.
The really good news is that this enables foreign students and workers who are already in the U.S. to qualify for a visa. The underlying requirement is that one should not be a burden to the US taxpayers, and hence be generating enough revenues to self sustain or leave the country.
He further write, "Yes, there is a risk for holders of this visa that, if their venture fails or doesn’t go anywhere, they must start again or leave the U.S. But that’s entrepreneurship - there are no guarantees (in startups). This won’t appeal to everyone, and it is not meant to. The Startup Visa (similar to the startup itself) is for risk takers."