Illegal immigration has been a hot topic in Washington this year, but after last week’s elections, the venture capital industry is hoping to steer the conversation instead to legal immigration.
The reason: They argue that lawmakers who have pushed for tighter immigration controls risk hampering both the high-tech industry and the overall economy.
“Roughly 50 percent of our portfolio companies were started by foreign-born entrepreneurs,” said venture capitalist Roger Lee of Battery Ventures on Sand Hill Road, a self-described “staunch supporter of more open borders.”
One tool that may help in Silicon Valley’s fight for more open borders is a study published today by the National Venture Capital Association. Among its findings are that 47 percent of today’s venture-backed startups have immigrant founders, and that in the past 15 years, immigrants have founded 25 percent of all U.S. public companies that received venture capital.
Those companies, including Google, eBay, Yahoo, Intel and Sun Microsystems, represent a market capitalization of more than $500 billion and have created thousands of jobs, according to the report, which took six months to compile.
To gather those numbers, the report’s authors examined Thomson Financial’s database of all publicly traded, venture-backed companies founded since 1970. It eliminated those that had merged, been purchased or were otherwise no longer trading on the public markets, and then determined the provenance of the remaining companies’ founders.
While difficult to predict the study’s impact, its timing may prove auspicious. “We’re very much hoping that Congress will take a (renewed) look at the legal side of immigration, and the woefully inadequate policies that are currently in place,” said Heesen.
As part of its efforts, the NVCA is lobbying to promote the passage of the SKIL Act of 2006, now before the House Judiciary Committee. The bill, introduced in late June, would exempt from current visa caps any foreigner who has earned a master’s or higher degree from an accredited U.S. university or been awarded certification based on his or her post-doctoral training.
The SKIL Act—which stands for the Securing Knowledge, Innovation, and Leadership Act—would also increase the number of H-1B visas awarded every year, from 65,000 to 125,000, with a 20 percent increase in visas the following year if the previous year’s quota is reached. H-1B visas, reserved for highly skilled guest workers, first were awarded in 1990, but the number of the visas was capped in 2004 at 65,000 by lawmakers alarmed by how big the program had grown. (From 2001 through 2003, roughly 195,000 H-1B visas were awarded annually.)