Founder Visas: A Good Idea

I
hate to admit it, but I'm not a fan of Indian food. 
And it’s not just Indian food, it’s almost any ethnic cuisine.  You
see, my immigrant parents aimed to fully assimilate: I’m named Chris, because that was the most popular boychild
name at NY Hospital in 1972, I was encouraged to play baseball because it was the
National Pastime, and nobody likes apple pie as much as me.  Nobody. 
And since my parents emigrated from different countries – thrown together by fate in Bryant Park on a sunny afternoon in 1970 – there was no
"local cuisine" at home.  F
or better or worse, my tastes were more influenced by the cuisine of Oak Brook, or Northfield, Illinois than by the food of anyplace else.

But there I was, eating lunch at Saravana Bhavan in Sunnyvale (ahh, the things we endure on our spouses' birthdays!) when I started noticing the t-shirts from local start-ups and NASDAQ 100 companies that stood out like a dense chain of barren, monochromatic islands among a colorful, undulating sea of saris.  I wondered
how many of these foreign-born tech-sters would still be here in one year's time?  Three
years?  Five years?  Because in case you haven't noticed, America is
facing a brain drain
unlike any in our history. 

America?  With a brain drain?!?  Whoa!  Now, there are a ton of reasons for it, but a
key one of them is the byzantine complexity of our immigration
laws.  (Check out
Manu Kumar's compelling success story to get an idea of the challenges faced by immigrant-entrepreneurs.)  But hey, immigration laws are complex because people bemoan the loss of jobs to immigrants; that's a debate that's been going on since the earliest days of the Republic and it's not one that I'll get into here.

But I will say that I'm a huge fan of Paul Graham's Founder Visa idea.  Why not allocate 10,000 of today's existing visas specifically to people who want to come here to start companies?  I get the whole H-1B controversy, but if someone's here to plant and nurture an entrepreneurial seed in the most fertile soil in the world, let's let them try before they go do it elsewhere and we find ourselves in a Dust Bowl.  Anyhow, if someone is trying to start a business, they won't be competing for jobs; the Founder Visa envisions prohibiting these cats from working for existing companies.

And indeed, the impact of these immigrant-founders on the economy is profound.  If entrepreneurship is as American as apple pie, then it's got a coconut burfi, a fortune cookie, some strudel, and a maybe a cappuccino or Tim Hortons double double on the side.  Some estimate that a quarter of all US start-ups are founded by people born elsewhere while over half of Silicon Valley's are launched by immigrants.  These companies aren't just creators of hundreds of thousands of jobs; they're part of the very idea of America, the America where anything is possible.

And that very idea of limitless possibility animated prior generations of immigrants as they helped forge a mighty nation.  Their memorial was the New Colossus that stands in New York Harbor.  And like those immigrants of yore, this generation of nation-building immigrants deserves a monument.  Wouldn't it be fitting for their symbol to be a virtual one, not a physical one?

So, you Twitter-heads among the readership: send a tweet using the #StartupVisa hashtag and include @2gov (or register on 2gov.org – see Eric Ries's post here for instructions).  Lend your voice to the clamor seeking to preserve one of the pillars of American entrepreneurship.

Keeping the Window Open

Most people seem to have a favorite Saturday Night Live skit.  One of my favorites is, "Ruining It For Everybody," a 1993 masterwork that features John Malkovich and some cast members discussing how they did something to ruin things for everyone else.  The Adam Sandler character, for example, explains why many restaurant bathrooms are now, ahem, "for customers only."

Of course, finance is full of people who ruin things for everybody, too (thanks for the SarbOx, Enron!)  But the most insidious wreckers are those companies that go public and then miss their numbers within a few quarters (what's up, Rosetta Stone?!?)  It's those flubs that have a chilling effect on the market for emerging growth companies. 

And as the IPO backlog builds, I hope the bankers take out only those companies that can keep the momentum going, not just those that will pay enough fees to help them get out of arrears at The Stanwich Club.

I say this because, as institutional investors, we've seen that movie before.  And I worry that the IPO market for IT companies could start to look like the market for biotechs: long stretches of desolation punctuated by sporadic frenzies of activity that end when public investors start to feel snookered. 

There are some good companies in the IPO pipeline right now and I wish them all well.  Their success should lead to more opportunity for other companies.  I just hope that the backers and bankers of some of the hundreds of other companies considering a public offering think long and hard about pushing a marginal or unprepared company into the arena.

Please don't be that guy; don't ruin it for everybody.