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March 17, 2011, 7:37 pm

Silicon Valley Backs Effort to Help Foreign Entrepreneurs

By EVELYN M. RUSLI

Senators John Kerry, left, and Richard Lugar introduced a bill with Senator Mark Udall, below, to give two-year visas to foreign-born entrepreneurs, an issue that has become a rallying cause for the technology industry.Fred Watkins/ABC, via Associated PressSenators John Kerry, left, and Richard Lugar introduced a bill in Congress with Senator Mark Udall, below, to give two-year visas to foreign-born entrepreneurs, an issue that has become a rallying cause for the technology industry.
Charles Dharapak/Associated Press

A New Zealand entrepreneur seemed to have everything lined up for the start of his social networking venture in the United States. He had raised $430,000, hired 14 employees and leased an office just a few miles away from the famed Sand Hill Road in Silicon Valley.

He had everything — except a visa. With his application still pending in December, he had to leave the country. Since then, many of his employees have quit, and his money has been depleted.

“The continual waiting is frustrating,” said the entrepreneur, who spoke on the condition of anonymity because his visa application was being reviewed. “I don’t know when I’m going to get approved — it could be in two or three months, or more.”

A group of lawmakers and prominent technology investors are trying to ease bureaucratic hurdles for thousands of foreign-born entrepreneurs as part of a broader effort to create jobs in the United States and spur innovation.

A new bill — introduced on Monday by Senators John Kerry, a Massachusetts Democrat; Richard Lugar, an Indiana Republican; and Mark Udall, a Colorado Democrat — aims to give two-year visas to foreign entrepreneurs if they secure at least $100,000 in financing from qualified investors. After two years, the start-up must have at least five employees and $500,000.

“In this budget climate, we are all looking for fiscally responsible ways to create jobs,” Senator Kerry said. “The Start-Up Visa Act meets that need.”

The issue has become a rallying cause for the technology industry, an area in which foreign entrepreneurs have played a central role for years. From 1990 to 2005, immigrants founded about 25 percent of the public companies backed by venture capital, according to a study by the National Foundation for American Policy, a research group in Washington. The companies include stalwarts like Google, Yahoo and eBay.

But there’s a growing concern in the technology community that the country’s immigration policies are keeping talent out, at a time when China and other emerging markets are becoming more attractive. The bill has the support of more than 160 industry investors, including Brad Feld, who started the Foundry Group; Fred Wilson, a Twitter investor; Reid Hoffman, the founder of LinkedIn; and Shervin Pishevar, an angel investor.

Many have their own experience navigating the visa process. Mr. Pishevar — who was born in Iran and became a United States citizen after his parents were granted asylum during the Iranian Revolution — has become a major advocate for immigrant founders. He recently helped Andrey Ternovskiy, the Russian-born founder of the chat service Chatroulette, secure a visa in about four months.

Despite growing support, the bill faces some challenges. An earlier version never made it out of committee last year. It most likely took a back seat to the divisive health care bill, midterm elections and the controversy surrounding immigration reform, says Mr. Feld of the Foundry Group.

But Mr. Feld and others are more optimistic this time. Although the bill hasn’t changed substantially, the conversation in Washington has evolved.

“In politics, the language of entrepreneurship didn’t really exist until this year,” said Mr. Feld, who is also a board member of Zynga, a social gaming start-up. “The language about creating companies was all around small businesses — some politicians didn’t understand what we meant by high-growth start-ups.”

With the unemployment rate at 9.5 percent, legislators are paying more attention to engines of job creation. Some of that focus is shifting to technology start-ups, many of which are raising serious capital and increasing staff significantly. The social shopping site Groupon, for example, has ballooned to 5,900 employees from 124 in less than two years. The team became so large that the monthly staff meetings were moved from the Chicago headquarters to a local church.

As the start-ups have grown, so has the influence of Silicon Valley in Washington. Earlier this year, the White House pledged $2 billion for early-stage businesses, as part of an initiative called Startup America. Steve Case, AOL’s co-founder, is among those heading up the effort, which is intended to encourage entrepreneurship in conjunction with private institutions.

Since February 2010, the State Department has coordinated several trips with technology leaders to countries like Russia, Indonesia and Egypt to learn about innovation in emerging markets. Closer to home, several top White House officials have made the trek to Silicon Valley to connect with the industry’s elite.

In the most visible moment, President Obama visited the house of a long-time tech investor, John Doerr, in February, where he dined with Facebook’s founder, Mark Zuckerberg, and Apple’s chief executive, Steven P. Jobs. Among other topics, they discussed how the government could strengthen its relationship with the industry.

“For too long, Silicon Valley thought it was immune to Washington policy, that we could innovate on our own,” said Mr. Pishevar, a founder of the Social Gaming Network. “Now, we realize that we have to engage, that we have to be part of the policy-making process.”