The Trump administration just moved to kill a key tool to support immigrant entrepreneurs, and the startup community must make our voice heard to save it.
Supported by Republicans and Democrats, the International Entrepreneur Rule (IER) operates like a startup visa and allows foreign-born founders to launch new businesses in the U.S., rather than overseas. IER is in place after the National Venture Capital Association (which I lead) successfully sued the Department of Homeland Security when it unlawfully delayed the program last year. But now, the administration is taking new steps to end the rule before it has a chance to bring new companies and innovation to our country.
Why would the administration do something so obviously counter-productive? That’s the question those of us who understand the importance of immigrant entrepreneurship keep asking. The track-record of foreign-born founders is staggering.
Studies show that immigrants have started more than half of America’s privately-held startups valued at $1 billion or more, and 43 percent of Fortune 500 companies were founded or co-founded by an immigrant or the child of an immigrant. A 2013 NVCA study found that one-third of all venture-backed companies that went public from 2006 to 2012 had at least one immigrant founder.
Specific to IER, one study found that the rule will create more than 300,000 jobs over ten years, although I believe this is on the low-end because a single entrepreneur could create a startup with tremendous growth or even an entirely new industry. IER is tailored to attract founders who are positioned to launch the next-generation of great American companies and would unleash fresh entrepreneurial energy and dynamism that we desperately need in the economy.
The Trump Administration’s hostility toward IER is also puzzling considering President Trump’s previous statements on immigration. During the State of the Union address, the president emphasized the need for a “merit-based immigration system – one that admits people who are skilled, who want to work, who will contribute to our society, and who will love and respect our country.”
Photo courtesy of Flickr/jvoves
It’s almost like he was describing IER without naming it. After all, we are talking about a program where a successful applicant must create a new high-growth enterprise that will in turn employ Americans and contribute to our nation’s technological and scientific advancement.
Furthermore, the applicant’s status in the United States is completely tied to the startup company and would be unable to remain in our country if the enterprise fails. There is nothing more merit-based than that, and yet the administration is saying no to the new jobs that come when young companies scale and grow.
The administration’s rejection of IER comes at a particularly troubling time for American entrepreneurial standing. Twenty years ago, U.S. startups received 90% of global venture capital, but that number has precipitously dropped to 54% last year.
Policymakers must understand that U.S. startup dominance is being challenged every day, and the top entrepreneurs now have a world of choices when it comes to where to launch their high-growth company. Other countries are copying the American blueprint for startup activity and making their countries more attractive for new company creation.
One way they’re doing this is by taking advantage of our intransigence on immigration policy and then welcoming foreign-born founders to their shores. The idea of a startup visa was first proposed in the U.S., and while we still don’t have one, countries like Canada, France, and Singapore have copied the idea and are reaping the benefits.
Rejection of IER is also incongruent with the Trump Administration’s goal of American leadership on critical technologies like artificial intelligence, robotics, machine-learning, and new drug discovery.
If we are to lead in these areas, the world’s top entrepreneurs must be here in the U.S., rather than overseas where they will compete with us. Rather than pushing entrepreneurs away, the administration should be fighting to attract top talent. That’s the only way the U.S. will be the innovation leader going forward.
Despite the overwhelming arguments in favor of IER, the Department of Homeland Security is moving forward to rescind the program before it truly gets off the ground. This is a setback to be sure, but so was the first DHS delay, and we beat the administration that go around. We’re going to keep fighting, but we can’t do it alone.
How can you help? The best way to do your part is by engaging in the public comment period that is open now and closes on June 28. Visit fwd.us/ier and share your perspective on why the International Entrepreneur Rule is needed. Everyone’s voice is valued in the process.
Tell your personal stories of immigrant entrepreneurs who have impacted our country, how IER will help maintain U.S. competitiveness, or how IER will create American jobs. Together, we can win, and by doing so help our country remain the best place on the planet to launch a new company that provides a better way of life.
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