When Seattle-based immigrant entrepreneur Manny Medina first tried to launch a startup, he had no staff or revenue. Two years later, the Ecuadorian founder’s sales engagement platform, Outreach, employed nearly 200 people and counted $10 million in annual revenue.
Now Medina, who came to the U.S. on a student visa before becoming a citizen, says he’s worried the Trump administration’s rollback of a rule that would have allowed more foreign founders to launch startups in the U.S. will drive other international entrepreneurs outside the country. That’s bad news for mid and large-size tech companies like his that rely on talent and ideas through the acquisitions of startups, the CEO said.
“These companies rely on a steady supply of startups for talent,” Medina told Bloomberg BNA, “That is a very important part of the food chain in the tech world.”
Medina’s concern is echoed by tech trade and advocacy groups like Engine and the Consumer Technology Association (CTA), which represents companies like Amazon.com Inc. and Facebook Inc. The groups say the Department of Homeland Security’s July 11 move to delay and repeal the Obama-era International Entrepreneur Rule could have a larger impact on the tech ecosystem by stymying the growth of a robust talent and innovation pipeline in the U.S.
“We need as many entrepreneurs starting businesses here as possible, both because immigrant entrepreneurs have an incredible track record of launching high-growth, successful companies and because increasing the pool of talented technologists in the U.S. helps boost the entire ecosystem,” Evan Engstrom, Engine’s executive director, told Bloomberg BNA.
Immigrants have long fueled Silicon Valley’s tech machine, accounting for almost 45 percent of startup founders in 2012, according to a Ewing Marion Kauffman Foundation study.
“Imagine if we had sent away half of Silicon Valley’s immigrant entrepreneurs,” Gary Shapiro, president and chief executive officer of CTA, said in a statement. “Without these immigrant entrepreneurs, it is unlikely America would stand as the beacon of innovation that it is today.”
The International Entrepreneur Rule would have allowed foreign founders to stay in the U.S. for 30 months to launch a business if they met certain requirements, like investment thresholds. Founders could apply to stay another 30 months if they met mandatory levels of U.S. job and revenue creation. The Department of Homeland Security said its delay and attempt to repeal the rule stem from border security concerns outlined in a Jan. 25 executive order by President Donald Trump.
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