The @TWTFelipe Story — A Tale of US Visa Policy Gone Awry (#startupvisa)

“Staple green cards to the diplomas of foreign students who graduate from any U.S. university in math or science” (Thomas Friedman)

I’ve been meaning to write this post since September of last year when Brad Feld first wrote about the The Founders Visa Movement. I commented briefly on his blog and made a mental note to write a blog post. I was prompted again by Friedman’s Op Ed this weekend on immigration & jobs, which was covered by Fred Wilson (more succinctly than I am capable of).

Two weeks after Brad’s post I was at the 140 Conference in LA and I held open office hours for any entrepreneur who wanted to spend 15 minutes talking with a VC about their business. I filled up with 20 people pretty quickly and realized this schedule was masochistic. But it turns out I met a bunch of really interesting entrepreneurs.

The one that stuck with me the longest was my chat with TWTFelipe (Felipe Coimbria). TWTFelipe is the founder of TWTApps, who had developed some really cool add-on applications for Twitter to extend its functionality. TWTFelipe and I ended up speaking for nearly 30 minutes and we talked mostly about why his company was based in Canada and not the US. At the time he granted me permission to write about his story. I hope that didn’t have a stature of limitation! ;-)

Felipe grew up in Brazil. He came to the United States in 2001 to study Software Engineering at Auburn University. In 2005 he was graduated and took a job in South Carolina working for technology company while he started his own web design company on the side. He made some mistakes on his immigration paperwork so he was forced to leave the country for 8 months. He spent a bunch of this time in Canada. By 2006 he had received proper authorization to move back to the US to join a company in the town I grew up in: Sacramento, California.

But TWTFelipe is an entrepreneur. He started another company on the side while he was working during the day at a technology company. His new company was called YowTrip and he wanted to work on it full time. But in the US your immigration is tied to your employment with another company so if you want to create a new company (read: create jobs) you cannot easily do so. So he decided to start his company in Canada. He applied for the necessary immigration papers to run his company in Canada.

While he was waiting for the paperwork to be reviewed he moved to Boulder, Colorado and took a job with a local tech company there. He told me that at the time he still held out hopes of being able to start a company in the US. As a technologist he felt the US was “ground zero” for technology innovation. But it wasn’t meant to be. TWTFelipe moved to Montreal, Canada. Naturally he is happy there and probably has few regrets. But I have some. TWTFelipe and everybody like him who want to start high-tech, green tech or other scientific companies in the US should be encouraged to do so.

That is the reason I am so supportive of the Startup Visa movement that has been so successfully championed by Brad Feld, Dave McClure, Eric Ries, Shervin Pishevar and many others.

I know all of this from first hand experience. At my first company, BuildOnline, we were based in the UK and decided to open US offices (read: create US jobs) but as the CEO I couldn’t leave our HQ. So I asked our COO, Stuart Lander (a Brit) to set up operations for us. Eventually he got paperwork to do so, but it was ridiculously long and riddled with red tape. We then moved our CFO, David Lapter, to the US. Again, much red tape even though David grew up in the US (he had since moved to Europe and married a wonderful woman from Romania). We then moved our Chief Software Architect over. He’s South African. More red tape.

I felt frustrated because I saw economic possibilities in our US expansion but it was riddled with all sorts of difficulties and complexities. By 2005 I had moved back to the US and we started hiring US employees (The first two employees we hired had both grown up in India! Irony, hey?). In 2006 we sold the company to a French services company. I wanted several of the software engineers to join me at our next startup but their employment was tied to BuildOnline. We had the consent of the acquiring company to take them yet US regulation prohibited it. So BuildOnline kept the employees on their books and they did subcontracting work for our company, Koral. Hrrmph.

In 2007 Salesforce.com wanted to buy Koral. You can imagine the complexities. They wanted to employ our entire team post acquisition. But two of our employees were tied to BuildOnline’s visa and four of our employees were in the UK. I won’t bore you with the details but the deal almost didn’t go through as a result of immigration hassles and it took a full 2 years for all of the employees to become proper employees of Salesforce.com in the US.

So immigration policy has always been top of mind for me. Not least of which because my father immigrated to the US in the 1960’s for his residency program of medical school. When he had finished the program the US wanted more doctors due to the Vietnam War. My Dad was drafted into the Air Force and was given accelerated citizenship. While many doctors went to Vietnam my father was a pediatrician and they needed those in the US. He was fortunate. It seemed that back then the US government recognized the importance of attracting the best and brightest from around the world. My dad’s father fled Jewish oppression in Eastern Europe as a teenager and ended up in South America. Immigration and multiculturalism were always top of mind in my household.

So I was intrigued when I read Thomas Friedmans’s Op Ed in December 2008 about the need to Reboot America. The world had just gone into crisis and I was in a period of reflection reminiscent of September 2001. Friedman said,

[we have] “immigration policies that have our colleges educating the world’s best scientists and engineers and then, when these foreigners graduate, instead of stapling green cards to their diplomas, we order them to go home and start companies to compete against ours.”

January 2009 where he said in a column on Tax Cuts for Teachers:

“One of the smartest stimulus moves we could make would be to eliminate federal income taxes on all public schoolteachers so more talented people would choose these careers. I’d also double the salaries of all highly qualified math and science teachers, staple green cards to the diplomas of foreign students who graduate from any U.S. university in math or science — instead of subsidizing their educations and then sending them home”

Crazy, huh? Subsidize their education and then send them home. He covered the topic again in June 2009 titled Invent, Invent, Invent. He stated:

“China is also courting trouble. Recently — in the name of censoring pornography — China blocked access to Google and demanded that computers sold in China come supplied with an Internet nanny filter called Green Dam Youth Escort, starting July 1. Green Dam can also be used to block politics, not just Playboy. Once you start censoring the Web, you restrict the ability to imagine and innovate. You are telling young Chinese that if they really want to explore, they need to go abroad.

We should be taking advantage. Now is when we should be stapling a green card to the diploma of any foreign student who earns an advanced degree at any U.S. university, and we should be ending all H-1B visa restrictions on knowledge workers who want to come here. They would invent many more jobs than they would supplant. The world’s best brains are on sale. Let’s buy more!”

Friedman again in this weekend’s (Apr 3, 2010) NYTimes:

“Between 1980 and 2005, virtually all net new jobs created in the U.S. were created by firms that were 5 years old or less,” said Litan. “That is about 40 million jobs. That means the established firms created no new net jobs during that period. … Good-paying jobs don’t come from bailouts. They come from start-ups. And where do start-ups come from? They come from smart, creative, inspired risk-takers. How do we get more of those? There are only two ways: grow more by improving our schools or import more by recruiting talented immigrants. Surely, we need to do both, and we need to start by breaking the deadlock in Congress over immigration, so we can develop a much more strategic approach to attracting more of the world’s creative risk-takers. “Roughly 25 percent of successful high-tech start-ups over the last decade were founded or co-founded by immigrants,” said Litan. Think Sergey Brin, the Russian-born co-founder of Google, or Vinod Khosla, the India-born co-founder of Sun Microsystems.

I was fortunate enough to spend 2 hours with Thomas Friedman in a group of about 15 people at UCSB last year discussing green tech, clean tech and immigration. I guess you could tell by my quotes that I’m a big fan (by the way, if you never read From Beirut to Jerusalem and want a better understanding of Middle East politics you should absolutely read this book). What I love about Friedman is that he’s neither “left” or “right” on issues. OK, he’s usually RIGHT, but not “right.” He didn’t mince words in our discussion. He stated clearly that the US is F’d up on immigration and both parties are fighting it.

Contrast that with my very disappointing meeting with Barbara Boxer last year. It was also in a group of about 15 people in law offices in Los Angeles. I asked her about how we could streamline the H1-B visa process for the best foreign entrepreneurs to start companies in California (this was before Brad ignited the whole Startup Visa movement). Her response?

“Well, I’d be for anything that helps but doesn’t weaken the positions of our existing citizens in California who are looking for work.”

Such bullshit. Uh, Ms. Boxer, go read Friedman. “Good-paying jobs don’t come from bailouts. They come from start-ups …25 percent of successful high-tech start-ups over the last decade were founded or co-founded by immigrants.”

I won’t be voting for Boxer or any other candidate that hedges this issue in an attempt to “not alienating their base.” I’m tired of politicians at the edges talking to the fringe voters to win primary elections. We need to create jobs in this country. We need to be positioned long-term in the US against countries that are hungry to compete with us on creating the next generation of startup technology companies. I certainly don’t want the next generation of iPad-like innovation to come “with an Internet nanny filter called Green Dam Youth Escort.” Do you?