In my last post, I talked about why I'm in favor of tweaking the immigration system to provide a Founder's Visa. It's reasonable to ask what the downsides might be, so I thought it might be useful to lay out some possible objections and how they can be managed.
Gaming the system. Will people be able to pretend to be founders to get into the country? As Pat put it, can I just open a restaurant to claim the visa? The safeguard here is money. The proposal is that you need to have over 10% of a company with $250,000 raised in a recent investment. Once the founder's in the US, that investment will flow into the rest of the economy. It's already possible to get a visa if you self-fund a company with a large investment, the main change here is to open the door to raising money from external investors.
So could you figure out a shady deal to fake the investment? Certainly people have been caught using undeclared loans to raise the money needed for the standard E2 visa, but this proposal doesn't make that kind of fraud any easier.
More spaghetti code. I grew to loathe the forest of obscure rules that make up the immigration system. It's truly mind-blowing how hard it is to get a simple answer to any question, there's so many special cases built-in. It's like a piece of code where years of bugs have been patched by adding yet another if statement to a monster function. The system fundamentally doesn't work, whether your goals are to reduce immigration (it has all sorts of obscure loopholes) or provide a fair way to encourage productive immigrants (it's so complex there's no guarantees you'll be able to stay).
I'm a big fan of the Canadian points system, where they give points for attributes they want in immigrants, like college degree, or work experience in an in-demand industry, and accept those with a score above a threshold. The Founder's Visa is yet another patch to the system, adding a little more complexity to the process, rather than the true overhaul it needs.
That said, I don't see any practical way to do a proper fix of the system, so patching it for this special case seems like the least-worst option.
Giving too much power to investors. There's a delicate balance of power between investors and founders, and knowing that the founder's very presence in the country depends on that term-sheet will give investors a lot of leverage during negotiations. A lot of founders are pretty nervous about this aspect, but I'm more sanguine. If you're a first-time founder getting investment, you're likely to be in a weak position anyway, and are to a large extent relying on the investors being sensible in their demands so that they don't weaken your motivation to make the company a success. In theory this tips the scales against you even more, but in practice the investors have their thumb on the tray anyway.
I'd like to finish by highlighting a comment from someone who ended up in prison for two days after he reduced his class schedule while here on an educational visa! My story's actually pretty tame, I know plenty of people who ended up having to leave the country, so I'm grateful mine has a happy ending.