I think you need to explain why you think an entrepreneur is "indentured" to a VC.
The entrepreneur has a lot more leeway in making decisions than an employee, and has more freedom in how to spend the company's money.
Do you think that a VC would choose a foreign entrepreneur just because they are foreign? Don't you think other factors (product, team, strategy etc) would play a larger role?
You're missing their point. Suppose you are an engineer in India making $10k / year. You have the same skills and ability as American citizens in San Francisco. So, a startup comes to you and offers you a $60k / year job. You take it, because you can make 6 times as much as you did in India!
However, when you get to the US, you realize that American citizens make $80k - $100k / year for the same job. What do you do? You can't switch jobs, because the H1B program makes it very difficult to do so. You can't threaten to quit, because then your visa only gives you a few months before you have to go back to India -- and back to the $10k / year job. You have no choice -- if you want the $60k / year job, you have to to stick with the company who hired you. So you stay.
The result? The salary for software engineers is driven down. The employer gets extra profits while getting the same work. The software engineers are now making less than they would be if either 1) the H1B program didn't exist, or 2) the H1B program were reformed so that switching jobs is easier.
(Trump did #1. However, #2, reforming H1B, is far better for all employees in the long run. Not surprisingly, #2 is not hugely supported by all companies).
This isn't at all how H1B visas work in Silicon Valley that I've ever seen.
There are definitely large contracting companies which abuse the H1B process in this way, but at Google/Amazon/Microsoft/Yahoo/etc I have never seen an H1B holder make any less than their counterpart born in the US.
Doesn't mean I don't agree the H1B system needs serious reform, but it's unfair to tar all employers with that brush.
(Best reform idea I've heard: the limited H1B slots go to whoever is paying the most for the job. Inherently prioritized the most economically impactful immigrants and also creates upward pressure on wages. Win/win!)
> I have never seen an H1B holder make any less than their counterpart born in the US
I have. And based on the patterns I saw in hiring, I expect that it's the same across the industry, even when companies aren't trying to underpay immigrants. It's a fascinating perspective when you get involved with hiring at the offer stage and see the negotiations. You can send the exact same offer to an H1-B and a citizen and the counter-offers will be completely different. A citizen will ask for more comp and an H1-B will ask for an EB2 sponsorship. Both are entirely rational decisions the since employment flexibility of a green card is probably worth more to an immigrant than an immediate increase in comp.
> Best reform idea I've heard...
I still think the best idea is to impose ratios like other countries do. Let companies hire as many immigrants as the like so long as they're also employing, in similar positions, the requisite number of Americans as well. If the theory is that highly-skilled immigrants are bringing skills and knowledge that's in short supply here, we should be trying to have them work with Americans as much as possible so that Americans can learn from them. Companies that abuse the current system end up having nearly all-immigrant work forces. Meanwhile, smaller companies without large legal teams can have difficulty getting even a single H1-B hired. Ratios fix both problems and they also help immigrants assimilate faster because there's less chance they end up working with mostly other immigrants.
Your idea of using salary as the deciding factor is great in theory, but in practice we don't allocate capital wisely. We'd end up with a lot of H1-Bs in finance and almost none in science or any of the many lower-paying areas that require education and intelligence.
> I have never seen an H1B holder make any less than their counterpart born in the US.
By pure economic logic, they must. Because the cost of the immigration attorneys and process has to be paid by the employee. If the employer absorbed that cost, it would be cheaper to hire local at the same price(salary).
Not only that, but the lower level of mobility an immigrant has means he cant switch jobs as easily, thus sacrifices potential earnings that a local wouldnt.
There is no way around it: any restriction you make will harm the person being restricted. It is thus that it think any kind of immigration policy aims at harming individuals at the request of others.
The best reform would be remove the requirement altogether and let companies hire who they want, and individuals work where they want to. While the US pertains itself to questions like how restrictive their visas should be, other countries panic at the constant brain drain.
Silicon valley H1B jobs are a tiny fraction of H1B jobs. Something like 90%+ go to InfoSys & Tata like consultancies which do exactly what the parent comment mentioned.
You're making an argument based on an infrequent exception to the rule
The parent comment was talking about H1Bs working for startups. Startups are not InfoSys or Tata. I agree with you and the parent comment, as I said, that H1Bs are widely abused by InfoSys and Tata and I would be very happy to see that abuse stopped -- but let's not tar startups with the same brush!
You're missing my point: this is not the H1B. This is an entrepreneur visa which is (presumably) less abusive.
The example he gave seems to indicate that the power dynamic you just mentioned carries over to entrepreneurs who have equity in the firm, who are empowered to make decisions and so on.
I'm not inclined to presume that it would be less abusive (or more abusive) or abused than any other visa program which creates financial incentives for domestic capital.
When the "entrepreneurs" very status in the US is dependent on being in the good-graces of anyone else - especially vultures like VC firms - these "entrepreneurs" are no better than indentured servants.
Think of it this way - any dispute with the "sponsoring" VC firm could snowball into a complaint to DHS which could result in the "entrepreneur" having to leave the country (and leave behind the carcass of a company the VC's will then proceed to digest).
Entrepreneurs might not understand or appreciate this yet, but they are better off going to Canada or somewhere else as landed immigrants with rights - instead of living in the US as indentured servants of some entity.
The junking of this rule has potentially saved so many startups from being absorbed by entrenched players (Hello Google Ventures). The resultant dispersion of wealth/ideas and the increase in competition will benefit all of us.
"Think of it this way - any dispute with the "sponsoring" VC firm could snowball into a complaint to DHS which could result in the "entrepreneur" having to leave the country"
I don't know if you believe this to be true. How would this work?
VC: We have a complaint!
DHS: Yes?
VC: The entrepreneur wants to grant more options to their main people.
DHS: okay... so?
VC: Please dissolve the company, make my equity worth zero, and return this person to their country?
DHS: What?
VC: Good point, just make them turn their equity into MY equity and then kick them out
I just don't know what you imagine this rule to be. How do you think this works? On an H1b you can just fire the employee and they have to leave. I understand the mechanics of the power. For a VC and an entrepreneur, the VC has shares in a company that is run by the entrepreneur. The entrepreneur ALSO has shares in the company and always will even if they leave the country.
VC: Hey DHS, Entrepreneur lied about something 2 years ago just before/after he came here.
Entrepreneur: That was not a lie - that was marketing. Every business does it.
DHS: "Get out"
> For a VC and an entrepreneur, the VC has shares in a company that is run by the entrepreneur. The entrepreneur ALSO has shares in the company and always will even if they leave the country.
This is nice in theory, but in practice (especially in knowledge economy companies), the employees are the company - everything else is furniture, coffee machines, ping pong tables...
The VC can just start a new company with ideas stolen from the person they just kicked out. They can offer the (now unemployed) employees of the previous company slightly more equity and money then they would have received at the previous company.
I don't understand why you are defending a system like this.
Let's just understand what "the system" is in the first place.
Whether it is morally good or bad we can decide after we make sure we are talking about the same system.
It sounds like you are suggesting that DHS would kick out the entrepreneur if there was a falsehood on marketing materials?
I don't know what that example was supposed to illustrate so please clarify, because I don't think that is how it would work.
Secondly, I don't know under what conditions DHS is allowed to cancel visas.
But let's more on to the other matter, which is the relationship between the VC and the entrepreneur. You acknowledge that the "knowledge" is key, but you still think that they can replace the person who is running the company?
Finally, you agree that the person would still retain ownership in the company?
Suppose you're an Indian making 10k a year in India. Then you have an opportunity to make 60k in America so you go. Native born Americans get paid more than you but you understand that it's really an accident of geography and bad policy, but you don't care because the opportunity will help you break your family out of poverty and open up doors not possible in India. So you stay.
Why due to the accident if geography is an American entitled to a salary that an Indian would be willing to do for less? How is that fair?
> Why due to the accident if geography is an American entitled to a salary that an Indian would be willing to do for less? How is that fair?
I am not going to argue about "Fair" because it is a value judgment which depends on your moral and political predilections. This isn't the right place for such discussions.
However there is definitely no such thing as an 'accident of geography'. I see this all the time expressed as a implicit argument, which I believe to be a form of pre-scientific thinking that has crept into our world view.
Sperm cells are not randomly selected in some kind of bingo ball system in the ether when a woman is impregnated.
It is one of the least random things possible - the entire catalogue of back choices of your ancestors is present as part of that inception. All of history, culture, geography, must have been necessary for you to be born where you are born. If you think otherwise, then you must not believe evolution theory is real or you have to be compartmentalizing it away from the present somehow, as if it were theoretical pure math instead of an always present reality.
Those who were elected/hired to make foreign policy and immigration law do not have the word "fair" in their job description, or at least nowhere near the top.
I have a million dollars. I hire you to manage it for me. You decide that, you know, it's kind of lopsided that one person have all this money, so you distribute it to 99 others. Do you have the moral high ground in this situation?
That's a pretty weird assumption. There's not any direct relationship between the number of software engineering jobs and the number of (e.g.) housing construction jobs.
The question is WHICH X people should we let in. Should we let in X low skilled workers or X high skilled workers?
You could perhaps make the argument that the US should lower the TOTAL amount of people let into the country.
But if that is your argument, then there is no point in talking about software engineers. You should be worried about the construction workers wages that are being reduced.
The rule, as proposed, required foreign entrepreneurs to receive "significant investment of capital (at least $250,000) from [investors]" or "significant awards or grants (at least $100,000) from [the government]" to demonstrate "potential to have accelerated growth" and job creation. The entire visa is based on the idea that startups have "significant public benefit".
The entrepreneur has a lot more leeway in making decisions than an employee, and has more freedom in how to spend the company's money.
Do you think that a VC would choose a foreign entrepreneur just because they are foreign? Don't you think other factors (product, team, strategy etc) would play a larger role?