Coming to America: Getting visas to do business in Silicon Valley
Michael Arrington
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One of the parlor tricks I like to perform when starting off any Silicon Valley talk or presentation is to ask the audience to raise their hand if they currently live in the area. Most people raise their hand. I then ask the people who were born in Silicon Valley to leave their hands up. Generally, in a room or say 1,000 people, maybe ten or fifteen still have their hand up.
That’s what makes Silicon Valley so special - it welcomes people from all over the world to come and build their dream. There is less racism, classism, sexism, or general prejudice here than anywhere else I’ve been. Part of it is the unique history of the bay area (See Berkeley and San Francisco), and part of it is that hyper-competition has no place for prejudice, it simply gets weeded out.
Perhaps the only thing that can destroy the ecosystem here is the U.S. government going out of its way to mess everything up. In particular I’ve been concerned about H1B visa quotas that severely limit the number of foreign workers that can come here legally. It’s something that I asked each of the presidential candidates I interviewed about. Listen to the interviews here, and see each of their positions on H1Bs here. I was also very happy to see Congress starting to take action to increase the quotas.
So, the timing on this guest post is good. Peter Nixey is the founder of Y Combinator startup Clickpass, an idea born in the UK and brought to the U.S. with the Y Combinator funding. Clickpass launched last month.
Peter wrote the post below chronicling his 5+ month effort to move his company legally to Silicon Valley. It is my sincere hope that sometime soon, entrepreneurs will be able to avoid many of these administrative hassles, and focus entirely on growing their businesses.
While the Silicon-Valley v. Rest-of-The-World debate rages on and on there are still some companies for whom it’s essential to be in the heart of the industry. Getting a visa to come the valley is not easy though and with more first generation immigrants than almost anywhere else I’ve been, every San Franciscan foreign accent has a war story of how they battled their way into California.
This is the story of how we brought Clickpass to California and how a holiday turned into a pitch turned into a company and finally into a successful product.
Visiting San Francisco
Today Clickpass is a platform servicing websites with tens of millions of users, a team of developers and an E2 visa to trade in the US. Almost 12 months ago to the day though it was little more than a vision and a dash of technical insight.
After having turned the idea over and developed it for several months in London we happened to be on a trip to San Francisco visiting the Auctomatic founders who at the time were on Y-Combinator. As well as seeing the California hills I wanted to speak to as many people as possible and to understand what the receptiveness of the community was to the OpenID platform we were proposing.
The inevitability of immigration
We managed to get a lot of meetings. Both Keith Teare and one of his platform architects took time to go through our business proposition, Chris Messina and I spoke for hours about how to bring the usability we were planning to OpenID whilst still staying true to the core open-ness of the protocol. We spoke with engineers at Google, Ben Bangert who was implementing OpenID at O’Reilly and then finally were invited to apply for Y-Combinator by Jessica Livingston.
At this stage we’d still only been in California for five days and it was already obvious that San Francisco was the right place to do what we were planning. The energy, expertise and density of web-tech companies was alien to anything we’d ever experienced in London or Oxford. Knowing the move wouldn’t be easy we immediately approached an immigration lawyer to find out what options were available.
Choosing a visa category
There are a number of different visa categories, each of which is designed to service different requirements. As a company looking to set up shop in San Francisco there were only a few which were relevant to us.
H1B: Temporary workers and trainees
Since being rationed by congress H1B’s are like gold dust to get hold of and swamped by large corporations. There are so many issued each year and by the time we were investigating the previous year’s quota was already full.
L1: Intra-company transfer
The L1 allows for a company to make an internal transfer of an employee with specialist knowledge required to direct the American component of a company. Technically it’s possible for a startup to create a company in both their home country and the states and then to transfer across. However it is obviously a very flimsy premise for the visa and is also likely to be difficult to defend since the L1 requires the the company still do a significant part of its business in the country of origin.
O1: Alien of Extraordinary ability
Although we originally disregarded it, the superbly named “Alien of Extraordinary Ability” visa has proved to be one of the most popular choices amongst people I know. There is one particularly good lawyer called Chris Wright of the Wright Law Firm who has an excellent reputation for success in this field.
E2: Treaty investor
The visa which we applied for was the E2, foreign investor visa. If you’re from a qualifying country and you can invest money in your business then the E2 is the perfect visa to look at.
The key advantage of the E2 is that once the company has jumped through the necessary hoops to be granted E2 status, the transfer of its employees is far easier. Whereas most other visas need to be applied for on a person by person basis, the E2 applies to the company itself and not a particular individual. This means that even though the initial application process takes months and months, subsequent key-employee visas can in theory be arranged and issued in a matter of weeks.
E2: A world of catch 22
Getting the E2, however, is an arduous process. At the time we applied, the delay between submitting our application and actually being granted an interview was five months. Not only that but the visa also requires you to demonstrate that you are irreversibly committed to doing business in the US.
You need to show that the necessary funds have been invested and are already at work which means that should you fail to get the visa… you’re irrevocably committed. Not a great position to be in.
Showing that commitment requires evidence of expenditure on US employees, an office lease, bank accounts, tax returns and purchase receipts for equipment. Unfortunately those are exactly the type of things that the US border officials do not like to see.
Pack lightly and smile sweetly
The E2 requires demonstrating to the Visa officials that you are committed to and investing irreversibly in the states.
At the same time though you need demonstrate to the border officials that you’re leaving as soon as return flight is due and not intending to return. You certainly shouldn’t be bringing anything into the country that indicates you’re intending to stay for longer than 30 days (local bank cards, photo albums, US cellphone etc.)
We did three long (i.e. almost 90 day) trips before our visa interview and although we never overstepped any of the regulations, entry was hairy during entry on our second and third visits.
Fortunately for me the guard on my third visit hated the number of passwords he needed to do his job and when he found out what Clickpass was doing, wished me luck and waved me on through.
Acronym onslaught
The majority of the E2 requirements, business plans, rent, investment etc. are well defined and achievable. However two of the things you need are a bank account and also, ideally, payroll for any US employees.
In order to get these though you really need social security numbers. You can’t get an Social Security Number SSN without being a US resident which means instead getting either an EIN (Employer ID Number) or an ITIN (Individual Tax Payer Number) both of which are a PAIN.
To cut a long story short, despite our best bureaucratic wrangling we were unable to attain ITINs. As if from nowhere though, an EIN popped out of a random conversation we were having with an official who it seems we charmed / confused into co-operation. It seems out that EINs actually require almost no paperwork and that the main thing required is persistence.
Final interview
It took five months from submitting the application to being granted a visa but finally in April of this year it was time to plead our case.
The visa interview takes place in the individual’s country of origin and for us that meant the American embassy in London. The embassy is a little like being in a bank as all the interviews are done standing up and through thickened glass windows.
After arriving at 8AM and watching about a thousand Camp America teenagers collect their J1’s, I waited for four hours before I was finally called up and to the E2 window.
Over prepare
The documentation we had submitted ran to over a hundred pages but the officer dealing with us was was very familiar with all of it. Given the varied nature of the applications he sees I was impressed with how much time he’d taken to understand and study our application.
We had some excellent advice from the law firm we were using in London and as well as having already submitted one large file of information I also took another two files worth of supporting documentation. This included bank statements, press coverage of Clickpass and letters of support from Valley luminaries. I ended up needing almost every single document.
Granted
The interview lasted about three quarters of an hour and at the end at the end were granted a two year extendable visa to live and operate in the US. After twelve months of waiting, hundreds of hours of preparation and thousands of dollars worth of legal costs the relief of being granted the visa was almost overwhelming.
Not only would the consequences of denial have been catastrophic to the company they would have also meant that I as an individual could no longer travel under the visa waiver programme and despite being a British citizen, would have had to apply for a visa every time I visited.
When to go for it
The visa application process is expensive, very time consuming and very energy consuming. It saps time, attention and energy away from the core thing that any young business needs to do which is to grow.
There are many companies for whom that distraction simply doesn’t make sense. For us though I have no doubt that it was essential. Only weeks after launch, Clickpass is seeing thousands of registrations a week and the influence, support and partnerships that the company made in Silicon Valley were critical to that early success.
Although my first choice of base would always be London, I have no doubt that as a young technology team we would not have had the success we did had we stayed. Getting the visa was not a whole bundle of fun but if I had to go back and do it again I wouldn’t hesitate for a second.
I haven’t read the full article however I get the gist … there’s a shortage of IT technical talent, yes I know.
If I was a brilliant IT developer I would still have to question why I would want to go to Silicon Valley, since it should be possible to grow a successful IT business almost anywhere these days.
The most important question- What is the minimum investment reqd to be considered for an E2?
Michael, I am not in the Bay Area, but out in Cambridge MA and the situation here is a redux of the Bay Area atmosphere. Cambridge is an oasis of innovation and “liberalism” in largely conservative New England.
As an entrepreneur running a small startup I have seen first-hand the challenges of hiring talent. I was unable to hire a brilliant a MIT PhD grad. (Turkish national) because of the visa situation - he would have been perfect for us. We interviewed many “American” programmers, most wouldn’t pass a basic programming test to say the very least, and have an attitude to boot (because Lou Dobbs told him he is entitled to the job)
The stock responses to such posts are hysterical rants of “there is no labor shortage, you just have to pay enough” or “H1b is cheap labor”, yadda yadda. Sure, like with everything else in life, there are some co.s that abuse the system, but the vast majority of H1bs bring a wealth of talent, skill and drive to the US. I hope the Lou Dobbsian crowd wakes up and smells the coffee, instead of just ranting about “foreigners taking American jobs”!
We ought to welcome people like Peter.
AS
Great article, answered a lot of my questions … our startup tunesBag.com (online audio library with native iTunes support) is currently doing operations from Vienna/Austria but this just seems not to be the right place … thinking about moving to UK or US with this idea …
@1 - to get coverage from TechCrunch am I right?
@Nik enough for your company to live during 1 year without any revenue, usually $100,000 is enough
James Robertson - After reading the full article, you will get the answer to your question.
Nik - It varies depending on the country of citizenship. I was told that it is anywhere from $200,000 to a million. Basically, the amount of money you need to start a business, with employees + physically location until you start generating revenue. If your site or business is already generating revenue, then it is fairly easy and “may” cost less. Keep in mind, that this investment does not include the amount of money you need to support yourself. So it does get a little complicating if you have a family.
You can bet there will quite a few opposed to the H1b visa claiming “greedy corporations” looking for “cheap labor” argument.
To them:
I suggest if the corporations are so “greedy” and “treacherous”, why are sanctimonious, holier-than-thou “saints” like you looking to go work for them.
Saints like you should get off your behinds and startup noble, benevolent, patriotic companies that only hire Americans, never offshore. Heck even pay all your engineers $250k starting salaries. Just get your great hero Lou Dobbs put his considerable money where his considerable mouth is, by funding you. And see how far you get. You will know what the situation is, once you run your own co. Stop the armchair QBing.
As the saying goes, if you want something done right, do it yourself! So do it!
Great article. Will definitely bookmark for future use.
We (Tablefinder) were in the process of moving the company from Sweden to the UK for investment purposes, but ended up not moving the business due to a bunch of Swedish tax problems.
Mike:
I am not sure I agree with you regarding “the welcoming arms” atmosphere. I do not live in the Bay Area, but have spent time fund raising and for work in the area and found the same levels of discrimination I have found in LA, NYC and other places in the US.
I do agree that these places have a much less of a racist attitude than NJ or South Carolina for example. But hardly the open arms you suggest. Just my experience.
@nik and @chris S
Quite a few people have asked me what the “minimum” sum is that needs to be invested. The advice we were given was that it needs to be significant in proportion to how much the business needs.
If you’re starting a software company it may only need to be a few hundred thousand dollars whereas if you’re starting an oil drilling company it’s going to have to be a whole lot more. We brought just over $200k of investment from the UK.
@1
There are many reasons for starting your business in the valley. Many think that the most difficult part of starting a business is creating the technology, but that couldn’t be more false. The most important think when starting a business is your network of connections.
That reason alone is enough for starting the business in the valley. (I’m saying this although I haven’t done so myself, but from what I’ve heard others experience).
This network of connections that is vital to succeeding is exactly what Seedcamp (www.seedcamp.com) is about, and if you’ve been there you know how valuable it is with connections.
I really think it’s time for many companies to start working towards eliminating the need for visa’s, depending on where you come from. –In the EU, any citizen of a member country can go work in any other country with no visa or other authorization needed. In this day and age, it would make a lot of sense for the US, Canada, and the EU to work together to expand this agreement.
As an American working overseas, it would be great if I didn’t have to jump through hoops depending on what country I want to work in, and I don’t consider it unfair to expect the same the other way around.
So maybe this will lead to the next company… clickvisa
Great summary..
hi
An encouraging and insightful story. Thanks for sharing this.
Hey Peter,
Glad you’re getting sorted dude!!
If all else fails, there’s always space for you here in Blighty…
Go well amigo, see you soon,
Gareth
The beauty of America is our diversity. If we intend to continue competing in a multi-polar world we must never lose site of this diversity. Our diversity is what makes this such a great place to live and work.
Great article.Provides useful insights for Non-Americans in case they want to do some business there.
The article does not mention about B1/B2.
I guess you can own equity in a company on B1/B2. So it is as good as being a co-founder.Only pitfall is you may not hold any position or work for the company. Do correct me if I am wrong.
Being an ex Bay Area programmer, I certainly agree to the argument that it is a highly competitive and less classy place for internationals (as defined). The usual migration trend for techies is from the East to West Coast. The sense of identity increases as one moves from the bay area to other parts of US.
There is a lot of politics behind the (mis)use of H1-B. Largely designed to attract skilled talents, it ends up in the pooling lot where applications can range from genuine talent to the ones that merely make it an entry point to US. Large service companies tend to over use the granted privilege (though limited in nature).
I would advocate a system in such a way that the deserved don’t get let out since we live in a time when “globalization” is turning out to be a Frankenstein’s monster. That said, i think, we are jumping in too early to a model that is in its fledgling state.
To put it in a nutshell, US has and will be largely benefitted by skilled migrant or skilled worker program. The question is sustainability of these talents as the important powers are in the hands of “idiots”!
Great read, i’d love to bring my apps to the valley however i doubt i have the connections to get the investment needed. Just out of interest did you raise your uk funding after the yc funding?
i might have to arrange a fact finding trip to the valley sooner or later. Did you guys have connections before you went to the valley or did you contact people to ask if they fancied a chat?
H1B is an issue because some indian consulting company may have used nearly half of the quota to bring indian undergraduates in, training them here and only paying them when finding a project.
CNN pointed out the other day that less than 5% of these HB1 Visas are for highly skilled workers. The rest are just normal workers with tech skills (mostly entry level)…just like any typical American that went to college.
Big Business needs to stay the fuck out of politics.
http://www.tech-exposed.com
I also do not agree about the ‘open arms’ part. I am an American (working in the Tech field) living abroad in Brazil and I understand first hand how hard it is for Brazilians to get Visas to the US.
I strive here because I have the ability to invest in the US and sell in another country
Hmm… this is a timely article for me as one payment supplier we want to work with insists on us having a US bank account. This is a hoop we have little chance of jumping through, so we’ll probably continue using paypal till their policy changes.
Our new start-up is based in the UK - a company limited by guarantee (Ltd.) is very easy to set up there.
A lot of my time is spent in the Czech Republic - in contrast the process of establishing a business in the Czech Republic is off-puttingly expensive & bureaucratic. I would have happily established a business in the Czech Republic was it not for our experience so far.
So, it sounds like the Czech Republic is not alone, trying to set up a business in the USA is equally fraught.
Well done for getting so far.
Interesting and well-elaborated material, yet it answers questions of entrepreneurs who has _decided_ to go on with US, while the major question in our times is why on Earth to do any business with US at all. I mean - why bother with country which goes into macro-decline caused by major geo-political shift, and hence all the effort is doomed in first place? World is full of other alternatives, just don’t get locked on US - even if Michael Arrington making all hard effort to sell you US as place to do business
“I want you to be an underpaid code monkey from Eastern Tadzhikistan being paid crap wages in some digital slavecamp in Greater Seattle!”
There has to be a ruthless filtering out process because there are so many Americans with potential who are being left behind in the job market
There are college educated youths who are unemployed or underemployed.
There are many qualified middle aged workers who can’t find work - as well as seniors who are not yet at the retirement age.
Also many of these frustrated individuals can not afford the tuition to go back to school.
Sadly, many of these people worked, paid taxes even served in the military but are now in desperate situations - worried about being homeless or even moving back home with their parents even in their 30s and 40s.
The right approach is not to grant visas but to invest in the Americans who want to survive in the job market.
What happens when they become burdens on society by no choice of their own.
The real answer is making education affordable or subsidizing them so that they can be competitive
It is sad that you live in your self absorb Silicon Valley cocoon and have no perspective about the real world outside
It is sad that you can interview Presidential candidates and ask them about visas but not question them emphatically about the homeless or unemployed Americans.
Also the nation is OUTSOURCING at a rate never before seen in our nation’s history - this is giving jobs to many
Between the tech outsourcing and the electronics outsourcing and the manufacturing outsourcing done by US companies - many around the world are able to work doing jobs that used to be given to Americans just decades earlier
There HAS to be a cutoff point - unless you want an increasing number of people becoming burdens on the taxpayers - or even worse - burdens on the criminal justice system - or joining the underground economy until they get caught or get killed
This blog has grown tremendously over the past three years - as a tech blog it was innovative - but once you wield your influence to get into national politics - you display a naive, arrogant, self centered mind that just should NOT delve into this area.
You are just not qualified or sophisticated enough to cover this ground
Can anyone comment on what visa is most appropriate for a Canadian either wanting to start a new company in the United States or take up on offer of employment. I hear the TN type visa is the way to go under NAFTA. Anyone have any experience?
@ 29: I feel compelled to defend TechCrunch here - since when do we need qualifications or sophistication to have a political opinion? I think everyone is ‘qualified’ to have an opinion if those opinions are backed by sound reasoning - and it seems to me that this article and your posted comment are both quite ‘qualified’ from that perspective. You have presented what I believe is the core of this argument - on the one hand wanting to import skilled labour, and on the other hand protecting your own job market for the benefit of native citizens.
Personally, I disagree with you, protectionism is ultimately counter-productive; true competition is the only way to motivate your own citizens to get off their backsides to compete for those jobs, not sit back and wait for the government to train you and assign you a job.
27 - my god you’re an idiot.
I worked on a TN Visa while working in NYC… $50 at the border, and you request it as you cross over to the US.
Key thing with the TN is you need to have a job prior to entering, and must be able to prove the requisite experience in order to be approved.
It’s not ideal for IT-talent - programmers cannot qualify on a TN. The closest thing would be a computer systems analyst, which I went over under. I had to explain thoroughly how what I was doing (UX/IA) did not involve programming.
@33, actually, that’s not true. I worked in the valley on a TN visa as a programmer. I also had to explain my job and had to go into detail on how I programmed, the language, and what the resulting software would do. The guy had no clue what I was talking about, but just wanted to see that I could speak authoritatively on the topic.
I’m very happy to see this topic discussed. After the visa restrictions became tougher after 9/11, it was clear that the US was shooting itself in the foot by denying talented immigrants to contribute to this country. I’m surprised it took so long until this discussion came up.
From my own experience and from the experience of friends and people around me, I know that the Visa system is like a big heavy fog. It’s super hard to find out information on the different visas available, how to get them, and if you’re fresh out of college, you can just forget about trying to find work, since barely any company will invest the time and money to get a visa for you if you’re not super-talented.
Restricting who may enter this country makes a lot of sense, but why restrict entrepreneurs and talent from coming in? Those are the people who are going to contribute to this country, they should be welcomed with open arms.
Oh yes, “racism, classism, sexism, or general prejudice” are eliminated when people are driven by money - let’s use the silicon valley model to lead our globe to peace and equality. Just because those issues are hidden behind SV’s driving forces (money and power), it doesn’t mean that they don’t exist.
Mike,
I am a recent immigrant/a new American and enjoyed reading your observations on “Coming to America: Getting visas to do business in Silicon Valley.”
Just thought you and your readers might enjoy my up coming unique aviation adventure around America: http://trikingaroundamerica.com and share in it as well to see what it means to be American.
Sincerely,
Chandu
There is truth to the article and there isn’t.
I went through the same thing by applying for an E2. I got it without a lawyer and for 5 years with an investment of $100,000.00. The whole process was sending the supporting docs to the US embassy in Germany, wait for the time to visit and than had 40 minutes talk and 2 days later we got the Passport back with the Visa.
Well, now everybody would say, “That was easy”. It does sound so but I worked for many month to get the paperwork ready and if you know what you need, and present it to the embassy employee in a nice fashion, it is fairly easy to do.
Also, it is no problem to set up a business in the US without being a citizen or having any type of Visa. You could go to legalzoom to do so or to the states website (Which is less money) and just apply for a LLC. You should have a UPS Post box or friend in the US so you can present a legitimate US address. Than you go to the IRS website and apply for the online EIN number which is a straight forward process. Once you have that (about 10 seconds) you can use that to go to any US Bank and open a business Account. With that you get a Debit Card which can be used to get all the other stuff you need since you do not have a US Credit History and thus no US Credit Card.
Once you rent something, open another business and use that business because in case something goes wrong or you need a bigger space and you have to move out before the end of the lease, you do not jeopardize your Visa!
The only thing that I hate about the E2 is the fact that there is no chance to get a Greencard because after all, you start a business and a new life here and why on earth would I go back again if things work out?!?
So far as I see it, H1B visas are one more way that IT workers are kept down in pay and social status. If you’re an IT worker, you’re not even white — when people call you a geek, you’re supposed to laugh. If you used derogatory names for black people or blue call people, you’d get in a lot of trouble.
Software developers, analysts and other people have more intelligence and skill than many doctors, lawyers and accountants. As much as people complain about a shortage of IT labor, they’re not willing to pay more or develop career paths that provide a route of advancement to IT workers. Many of us end up doing entrepreneurial things because we can’t get through the “glass ceiling” that exists in most organizations.
As for discrimination, maybe that’s the reason Clickpass moved. So far as Silicon Valley is concerned, Modesto and Sacremento are in another county. Los Angeles and Las Vegas are on another planet, and the rest of the world in another Galaxy. Clickpass could have gotten their software developed in the UK, but companies based in Silicon Valley wouldn’t even have considered joing their authentication network if they weren’t there.
“The visa application process is expensive, very time consuming and very energy consuming.”
That just about sums it up succinctly from my own experiences, even with an L1 company visa.
The article doesn’t mention B1/B2 or TN visas (the latter for Canadians) but they are temporary options that can be considered for some individuals.
Mike -
Thanks for bringing this up.
If this is a problem on one side there is another side to it with aspiring entrepreneurs getting stuck in their green card process and not able to start a company (and their American Dream).
There are so many aspiring entrepreneurs who are going thru the US Green Card process and who are not legally eligible to start a Corp. or Inc. They can’t work for their company they start. They see their ideas just pass by (there with their American Dream) just because they can’t start and run a company in the land of the future. So bad that these days the US Green Card process is just so ignored by the Administration and takes years and years to process. Can an idea wait for that many years? I’m talking about 7 or 8 years here.
Something has to be done to these legal, talented, law-abiding, tax-paying immigrants who are stuck in their green card process. Worst we lose the next Sergey just because of our politico citizens who didn’t have to go thru this pain.
“There is less racism, classism, sexism, or general prejudice here than anywhere else I’ve been.”
Let’s see. Last time I went to a TechCrunch party on Sand Hill Road, about 90% of the crowd was white guys in khakis.
You are right about there being less racism and sexism but that’s because there are hardly any minorities (unless you count the janitors) and there are hardly any women (unless you count the secretaries and useless marketing chicks).
In terms of classism, there are two classes in Silicon Valley. Those with vested, in-the-money stock options that are liquid and those without.
So basically it is the utopia Michael describes and if you’re a white, overeducated male with limited experience with women, a thirst for money and a big ego that overcompensates for the fact that you were teased in high school, Silicon Valley is the place to be.
By the way, about 75% of those white guys in khakis don’t know how to tuck their shirts in properly.
you’re joking right, about the “less sexism” .. “than anywhere else.” you should talk to some women in SV. we can’t really complain about it too much publicly because then we’d be constantly whining about it.
but this is the only place i’ve seen rampant sexism (the first 5 years i didn’t believe it because i’d not seen it elsewhere). it’s so pervasive in SV, so entrenched. it’s awful.
mike, go to a women in tech meetup and listen. the other night at the Girls in Tech event, when it was really only women in the room, all founders or leaders of one sort or another, we all acknowledged it, and had fresh recent examples that were personal and appalling.
or ping me offline and I can tell you my own experiences (that I consider confidential because no one would work with me if they were public).
Increasing the H1-B quota limit is the key to saving this industry from the ravages of an economic recession.
We need to import those individuals who have the TALENT and SKILL to accomplish the goals we want at A COMPETITIVE PRICE.
If we are being forced to pay 150K+ for an average domestic programmer, then we cannot be competitive in the new global landscape, and we will ultimately lose out.
In my experience, H1-Bs possess the skills we need, at the price we need to survive. Its simple economics.
And for all those complaining about the H1-B program, ask yourselves…Do you really want this country to lose its competive edge in this new global economy?
Ex-Googler, Now-Facebooker - You sound like a racist yourself. A little insecure at your failures? Loser. Anyone who’s lived in the valley long enough knows your full of #@$%.
Way back in the day - I applied for an E2 while still on an H1B. In order to get it,
the new company had to have a track record of doing business in the US - so essentially that meant doing 2 jobs for 6 months to build up enough cash in the new company to qualify. EIN number was easy - did it online. SSN i already had.
The problem with E2 though, is that you have to renew it every 5 years - which means visiting the Embassy in London (home country) or crossing the border into Mexico and setting up an interview with one of the consulates there. You have to take the entire family though. Quite why in this day and age, it all cant be accomplished internally within the US i dont know.
Now even though you have a visa valid for 5 years, every time you enter the country you have to get a new I-94 - which allows you to stay for 2 years max - each family member has a separate I-94 so keeping track is fun.
Also, because you have created your own company - you cant apply for a green card (self sponsorship is not allowed) leading to the situation where if you stay here long enough your kids have to go through the visa application process to go to college after high school.
I had the chance to immigrate to USA and get the GC permanently which could be renewed every ten years. However, whenever I made a trip abroad and returned I got “special treatment” by the motherfuckers from the US airport because they never want to believe that I was still living and working in USA. ALL of them were telling me ALL THE TIME that I would have to stay in USA and they were asking me why I visited this country and that country and so on.
I like my privacy, I on’t think that having a GC should not mean that I have to reveal the reasons why I visited this and that country for a few weeks and many more sensitive things. I also don’t think that just because I am travelling abroad many times, even though for a few days or weeks only, I would have to show PATRIOTISM to my country of residence, USA. THAT’s what the IO at the airport really want. When I told them that I spend my holidays abroad, they were telling me I would have to spend my holidays in USA. Really.
As I didn’t need to stay in USA and get all this damn paranoia, I decided to give my GC back and move to Germany.
When I wanted to visit USA as a tourist later I was cautious and asked the US embassy in written form whether I can visit USA as a tourist under the Visa Waiver Program because I had given them my GC. They answered, yes, I could do that.
But when I arrived in USA the IO interrogated me for almost five hours and asked me many, many times what the real reason was that I didn’t want to live in USA anymore. They did not want to accept that returning to the country of birth and citizenship is the home of such people. So they were pissed off and they told me I would not have appreciated my GC. They send me back to Germany with the next flight. I had to stay in a locked room with no windows and the IO were all comminicating in Spanish because they were Hispanics.
I have not committed any crime and I am not a terror suspect but nevertheless IO at the US airport always treated me like shit.
From financial point of view I don’t need USA.
From a social aspect, I have friends in USA, but I on’t need to be there to see them.
From a business point of view it is a disadvantage that I am forced to go to the US embassy, spend lots of time and apply for a visum even when I want to visit USA for just a few days.
America still thinks it would be the superpower and that the world would need USA. But nowadays the reality is the opposite: The US dollar is worth a shit. Talented IT specialists and engineers can be found in Eastern Europe easily. It is very easy to hire someone from another country of the EU. I can visit and work in any country of the EU. The Euro is much more worth than the US dollar. It is easier to attract talented IT specialists from Asia to work in Europe because they earn Eurosinstead of weak dollars.
The US economy is going down and will stay down for the next years.
It is time for America to show some humiliation and ASK foreigners POLITELY and treat them NICE to immigrate into USA.
When I visited Canada, the IO asked me why I was denied entry to USA even though I have a stamp proving that I had a Green Card. When I explained him the whole story, the Canadian human being shook his head and he gave me a six months visa even though I told him that I am visiting Canada for just a few days. Canadians need immigrants and therefore they know that they should treat foreigners nice. That’s a lesson America needs to learn.
In the next 42 years, that means in 2050, number of people in USA will increase from now 300 million to 500 million.
America is broke like shit.
Violance is common in USA. Even students get shot frequently in US colleges.
The economy is going to suffer in the next years.
Arrington demonstrates in his blog quite often how often people sue each other because of no reason. Sueing has evolved into a game to scare people or to use it for marketing purposes.
I have great American friends who I miss a lot. But you know what? They completely share my views. I feel pitty with them that they are Americans because I know by my own that people always love their hoe country and that therefore they would want to stay there.
Highly talented Indian IT specialists and engineers will want to move to countries like Germany because we allow them to speak English, or they move to UK because of the language. Why should they want to move to USA where they earn less because of the weak US currency?
I can do everything in UK and in Germany what I could in USA. Investment? No problem, there are countries which have more money than ideas where to invest in.
Arrington is a clever guy. He wants engineers and IT specialists from abroad as soon as possible before they notice the advantage of Europe and before USA is nothing worth.
@ Aaron Schon
I have seen this system horribly abused in the only situation where I have seen it used. Companies using H1B aren’t looking for talent, they are looking for cheap labor from people who won’t complain for fear of getting sent back.
@where to begin
I was one of the first 500 employees at Google. Let’s just say I’m doing alright.
I’m sorry you’ve been toiling in the Valley so long and haven’t had a liquidity event. Maybe you need to choose the startups you work for a bit more carefully.
That is the longest post I think you haven’t wrote for a while now.
To “Michael” @48 — Just remember to renew your membership with the Taliban…
Mary Hodder: I’m really sorry to hear that you’ve experienced sexism and I think you’re a very strong woman for standing up to it.
I’m the CEO of a VC-backed company (we just raised our Series C). I was previously the SVP of Business Development at a publicly-traded software company in Sunnyvale.
I drive a 2008 Mercedes-Benz CL63 AMG during the week and a 2007 Ferrari 430 Scuderia on the weekends. I have a home in Atherton and a second home in Incline Village. My revocable living trust has assets in the upper 7-figure range.
I’d like to discuss your experiences further and see what we can do to fight sexism in Silicon Valley. It’s an issue that’s very close to my heart. My first wife was sexually harassed as a young woman and it really caused some severe emotional issues that led to our divorce.
Why don’t we meet for dinner next Friday so we can brainstorm about ways to bridge this divide? Manresa or Chez TJ - your choice. I’ll pick you up at 9 pm. Wear a skirt and heels and bring an extra set of clothes for the morning.
PS: I cook a mean breakfast.
Back on December 17, 2001 I remarked about the “H1-B flak”.
Back on September 22nd, 2003 I lamented the reduction (195,000 to 65,000).
I find it interesting that the discussion is attempting to peak again.
It sucked then. It sucks now.
As an American I agree that borders should not bar talent. As a globalist I wonder how ‘developing countries’ can truly develop when the developed nations continually drain them of their brains.
Also, diversity training programs, especially for Indian and Asian tech visa immigrants, really needs to be empasized as all to many exhibit sexist behaviour and are quite racist towards blacks and, to a lesser extent, hispanics (the Indian caste system, for example, makes darker people ‘invisibles’).
@Claude
We offer diversity training programs for talented Indian programmers who are a) racist and/or b) sexist.
For those who are racist, we take a field trip to Compton and Watts. That is effective 99.5% of the time. For the other 0.5%, our training specialists, Leroy, Tyrone and DeShawn engage in an intensive session that can turn around even the most racist person.
For those who are sexist, we take them to a popular strip club in Las Vegas and then to a “private” training program in one of the suites at the Venetian. When Pradeep realizes that he wouldn’t know what to do with a 5′9″, 115 pound blonde with C-cups anyway, he becomes childlike and all sexist tendencies are removed.
In fact, many of the graduates of our sexism training program go on to worship the cute females in the marketing department as if they were the Hindu goddess Lakshmi.
This case is the exception and not the rule. Tech industry has been planting these type of stories for years. Tech visas are used primarily to depress wages.l
Thanks for a great article. Really useful to a lot of people.
Until consulting/staffing firms are prevented from using H1B’s, I will continue to oppose them. Narrow the process to where only those with truly unique skills are allowed, and then only to companies involved in R&D, and then special visa’s for tech would be OK. Otherwise, go the same route as any other immigrant.
These days companies are so focused on particular skill sets/programming languages they ignore the potential of a person. As a mid-lifer with 15 years IT experience trying to refocus and gain experience is difficult. I’d love to see companies like Oracle or Microsoft offer an affordable training program in their particular technologies so talented and willing U.S. workers can gain the experience to compete against the multitude of foreign workers.
Oh ya, and if you’re not familiar with the work of Georgetown’s Professor of Economics & Public Policy, Dr. Ricard Florida (http://www.creativeclass.com) and his books “The Rise of the Creative Class” “The Flight of the Creative Class” and “Who’s Your City?” — you’re really want to check that out.
If that is from UK, imagine that it is much more harder to do the same thing from a “developing world” country.
I does not matter how much money you have locally and how successful you are, or your great plans and commitment to invest in the USA and take your idea globally. They treat you like you are asking for a favour and that you have to beg to get in.
Really interesting post, thanks for taking the time to write it Peter!
Great post, Michael!
As a European working in a US startup I know how extremely frustrating the visa situation can be. I have many, many friends stuck in “limbo”, waiting for their green card apps to be approved while working on H1B-extensions. One of my friends have been studying and working in SV for 11 years — and her green card will hopefully be approved within 6 months. 11 years of paying taxes and being a good citizen, a clean record and still no green card? If you get the foot, then what? 2 weeks to leave the country and leave everything behind?
I believe the strength of this country has always been that it can attract highly talented people that are willing to give up their lives in their home countries to succeed here.
CW
There are lots of students, coming from the other countries, graduated with advanced degree every year and stayed in the U.S to work for high tech companies with H1B visa.
There are lots of skilled or talented people, coming from the other countries, choose to work for US employers with H1B visa.
There are lots programmers with not much real experience, shipped here from India by small body-shops with H1B visa, start with low salary, gain more experience, and stayed in US with GC.
There are lots of programmers or IT managers, shipped here from India by big out-sourcing firms with H1B, gain experience, sent back to india and start another round of fetching US business.
The H1B program is important for high tech business to keep competive, and at same time it is definately being abused by body-shops and out-sourcing firms. The Congress should fix the immigration system to
1) attact and keep the talented and skilled people, and students with advanced degree
2) stop the India firms to steal our jobs
Good thing you bring some awareness about this situation.
I’m having the hardest time ever bringing my wife in the country (she got deported) even though I have a green card and my kid is a US citizen. It is compromising my staying here.
There should be a tech coalition to lobby to US immigration services…
Yah there’s no racism here. That’s why there’s almost no African American or hispanic managers, executives, engineers and programmers, right?
Ex-Googler, Now-Facebooker - Join the club, I’ve had several liquidity events as well, but unlike you I’m not walking around with a racist chip on my shoulder jackass.
“That’s what makes Silicon Valley so special - it welcomes people from all over the world to come and build their dream. There is less racism, classism, sexism, or general prejudice here than anywhere else I’ve been.”
Yeah - but YOU also have to tell these people who want to come here that Bay Area is NUTS - tons of politics, strangers getting in your private personal business and finances (i.e. ValleyWag - which makes alot of fluff up to get an audience), Keeping up with the Joneses and having to have a stupid BMW, Mercedes, Ferrari or Lambo to show other people that “you made it”.
I’ve been here for less than 5 years and have seen all of the above. Thanks Bay Area for giving me stalkers! I would rather live in a small, peaceful town than deal with all this bullshit.
@where to begin
* Sarcasm is a sign of intelligence. You clearly don’t understand sarcasm, therefore you are not intelligent.
* If pointing out that Silicon Valley is a white male locale and that technology companies, comparatively, are “less friendly” to minorities and women makes somebody racist and sexist, please join the Democratic party if you haven’t already done so. Clearly you’re a guilty apologist.
Oh yeah - and don’t forget - intelligent people from other countries will have to sacrifice their kids’ education because the schools here are always shutting down. Please make sure to tell these ppl that they will have to spend $20k/year for private school on top of the high housing cost.
One last thing… please tell them we are in a recession and remind them what happened when the Bubble Busted.
Thanks!
I always laugh at the cheaper labor argument, because H1s and L1s cost me much more to hire and they make the same amount as my US based programmers (all paid over 6 figures). I hire these people because of their talent level, not because of price. There may be some abusing the system, but some of the best companies in tech have been founded in the US by foreign born people.
There are 2 bills in congress on this issue. You can vote on the bills and have your vote sent direct to your elected representatives. Get involved!
http://www.govit.com/H_R_1930/.....rease_com/
http://www.govit.com/H_R_1930/.....rease_com/
Here’s the link to the second bill…
http://www.govit.com/S_1083/A_....._to_incre/
Sorry for the mistake
HAHAHAHA ROFL @ #53!! TOO GOOD.
Hi, Any one has experience applying for Green Card in the EB5 category?? - How does that work out for talented individuals trying to make a home in US.
Thanks.
Someone mentioned that you can’t work for your own company if you are in H1 Visa. It is right and I’m in such situation. I started my business 5 years back when I was in non-immigrant visa and we have reached 3.5 mil. gross last year. We paid taxes for 400 k last year. Still I can’t get salary from my company because I’m not eligible to work in my company.
Thanks mike. That was good topic.
Cheers, Nag
Yeh, right.
Businessmen feel if there are only 100 applicants for a job, and only 50 are qualified, and only 5 walk on water for minimum wage, then there is “a critical shortage of labor.”
How do we explain that in the 60’s before the massive invasion of foreign techs began, the U.S. was the leader in virtually every field of technology, whereas today industry (other than subsidized defense industries)is moribund and innovation increasingly comes from Japan?
Businessmen and their lackeys in Congress targeted the engineering and science community with immigrants much as they successfully targeted construction labor with a combination of union busting and illegal aliens, but in R&D quality is more important than quantity. Many scientists fled for greener pastures in the 70’s when they observed the tsunami of immigrants glutting labor markets, their place taken by third world hacks. It’s kind of a vicious cycle–the hard work involved in getting an engineering or science degree is not terribly inviting to Americans anymore because of the glut of immigrants, so businessmen want more and more immigrants, evermore decreasing the quality of R&D.
Silicon valley may be the exception that proves the rule. Also one might suggest that programming isn’t as highly technical as engineering and the physical sciences so that the difference between a third worlder and the types of engineers and scientists we were graduating in the 60’s is not so apparent in Silicon Valley.
Don’t forget the E3 visa, which is like an H-1B, but differs in two respects. First, it’s only for Australian citizens, either a deal-breaker or a godsend because the yearly quota has never been reached. The second thing is that when getting an H-1B the intent is to become a permanent US citizen, while with the E3 it’s a temporary visa were you must prove you wish to return home after two years (relatives or girlfriend live there, deferred job offer in your country, plans to attend university for an advanced degree, etc). The company requesting the visa also has to pay a prevailing wage, which is not good for unfunded startups. Note that the person applying for the E3 only has to have Australian citizenship and is not required to be a current resident of Australia if they can prove there is a reason to leave the US after the two years is up. I believe these visas are fairly easy to extend and do not restrict applying for American citizenship or an E2 visa in the meantime, if that is your goal. The interview process is relatively painless and can be completed as you cross the border. In my opinion, it’s by far the best option when hiring Australian nationals.
I’m from the UK, currently here on a H1B visa, and having been through this for years am pretty familiar with the hoops.
Its certainly easier to come to the US first as a student, or with a multinational company. But its just about possible to come directly here with some finesse and a lot of patience.
Luckily being located in Silicon Valley is less important and a lot of successful startups are founded elsewhere.
L1 is way more (ab)used than H1B. Abuse of visas is the real issue here and should be curbed. Impose a minimum salary of $100k on every H1B visa
Yes absolutely, we need more H1B visa for IT consulting.
Its easy to make more money just by placing H1B workers.
The only things needed are initial paper works.
Its good for company and lawyers too. So, overall its good
for US economy.
Please any one who has worked in Tech for the last 15 years knows H1B and L1 visa’s are a joke. I have met so many Indians that have these visas that are no more qualified than any other American. May be 15 years ago you’d meet an IIT grad but now a days you find most of this guys or gals have degrees from schools that wouldn’t rate any better then ITT, or any other certificate type program. As for the Cambridge MA startup, yeah if you go to MIT we should welcome you. If Infosys or any of the other consultant companies say they can’t find or train an American to do the job then we should say no. I think you’re as misinformed as most people about this subject.
Are Indians eligible for E2 ? Bangalore is where I’m now, and Bengaluru is great.. lot of startups and lot of IT companies.. But only Indians live in here.. may be if Bangalore starts attacting foreign talent.. it will beat Silicon Valley..
What percentage of H1Bs go to the top 5 or top 10 companies? That’s what needs to be changed. Giant contractors and a handful of giant companies that actually produce things get a huge percentage of the H1Bs.
All you guys knocking the H1-B program, got to WAKE UP and smell the coffee.
We are in an increasingly competitive global landscape. We MUST remain competitive to keep our economic status intact. Otherwise WE will LOSE.
We need the best and brightest in the world helping us to move our industry forward.
If we are forced to pay 100K+ to EVERY worker in our payroll, we will not survive…plain and simple. We have to survive, and that means bringing in the best and brightest who are willing to work for a reasonable wage.
If Congress does not increase the H1-B quote dramatically, our tech industry is doomed, and you will ALL be out of a job.
Its called common sense.
@Brian -
you are an exemplar of everything my post summarized! So you think I should hire an “American”, just because s/he was born here and is entitled to this job, before a far talented “foreigner”. What gives you the right to tell me how I should run my business?
If you know better, why don’t you start your own business following your Lou Dobbsian ideology, seek his investment, and like I said - get Lou Dobbs to put his big money where his big mouth is - and good luck to you! What is stopping you?
You, I and anyone who reads this post, more than knows the answer to that!!
@Jim McNelis
If you get your news from CNN and Lou “bitter old man” Dobbs, you are sadly misinformed. Get out of his cult. You are no different from the bitter folks who watch the other angry old man Bill O’Reilly’s histrionics, looking to blame everyone but themselves.
“..less than 5% of these HB1 Visas are for highly skilled workers.”,
well guess what, less than 5% of reports on CNN have any 0.00005% credibility.
@Anonymous
You are just another case-in-point and offer the stock response of “cheap labor”. I am the first person to concede that credentials of people on H1b should be thoroughly examined, and the “due diligence” done to prevent the body-shops from exploiting it.
Having said that, there are plenty, and I mean a good majority, of “American programmers” who tell all kinds of fairy-tales on their resumes, make up skills, experience etc.. You should see the people we have interviewed. Absolute howlers!