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The Economic Case for Welcoming Immigrant Entrepreneurs

Learn how strategies for how a “startup visa” would allow immigrants to start businesses in the United States after satisfying certain funding, employment, and other requirements.

Written by Dane Stangler and Jason Wiens

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There’s something inherently entrepreneurial about leaving your home to start a new life in another country. Perhaps that is why immigrants tend to start businesses at a disproportionately higher rate than native-born Americans.

entrepreneurship policy digest startup visa legislative proposals

Immigrants have a long history of starting successful businesses in the United States. From Alexander Graham Bell to Sergey Brin, immigrants have created some of America’s most iconic companies.

In fact, more than 40 percent of the Fortune 500 companies in 2010 were founded by an immigrant or the child of an immigrant. Yet, despite their vast economic contributions,  U.S. law provides no dedicated means for immigrant entrepreneurs to launch innovative companies in the United States.

Meanwhile, other countries are stepping up to attract foreign entrepreneurs. With new visas, countries like Canada and New Zealand are competitors for international entrepreneurial talent.

Research suggests a visa for entrepreneurial immigrants could boost U.S. economic growth and create American jobs.

Commonly called a startup visa, this new means of entry would allow immigrant entrepreneurs to start businesses in the United States after satisfying certain funding, employment, or other requirements.

entrepreneurship policy digest estimated economic impact of a startup visa

Immigrant Entrepreneurship by the Numbers

Kauffman Foundation research has contributed to a greater understanding of immigrant entrepreneurship and its corresponding economic benefits. Highlights and application of research tell a compelling story.

Company Formation

  • Immigrants were almost twice as likely to start businesses in 2012 as native-born Americans.
  • 28.5 percent of new entrepreneurs in 2014 were immigrants, which is up from 13.3 percent in 1997.
  • About one-quarter of the engineering and technology companies started in the United States between 2006–2012  had at least one key founder who was an immigrant.

Economic Impact

  • Immigrant-founded engineering and technology firms employed approximately 560,000 workers and generated $63 billion in sales in 2012.
  • 24 of the top 50 venture-backed companies in America in 2011 had at least one foreign-born founder.
  • Immigrant founders from top venture-backed firms have created an average of approximately 150 jobs per company in the United States.

Research-based Strategies

Broaden Eligibility Thresholds

  • Fewer than 1 percent of new businesses receive venture capital investment at the outset.
  • While not all businesses receive outside investment capital, viable businesses will generate revenue. Recognizing that it can take time to develop, market, and sell a product or service, revenue generation over time could be a measure of potential entrepreneurial success.
  • Since a startup visa is meant to boost economic growth and create jobs, initial job creation could be a measure used to determine visa eligibility, so long as the requirement is not overly restrictive.

Create Easy Pathways to Entrepreneurship

  • Most immigrants come to the United States to work or study. A startup visa could allow foreign students and workers to smoothly transition from school or employment to entrepreneurship.

Increase Number of Visas

  • Adding more visas for immigrant entrepreneurs will allow a startup visa to have a greater impact on employment and job creation.

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