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In the few weeks since I wrote the post The Founders Visa Movement there has been a ton of positive momentum, input, ideas, and support. Thanks to the efforts of Dave McClure and Eric Ries, we shifted the name to the StartupVisa, figured out that the EB-5 visa was the most logical one to try to “modify”, and got a web site up about it. In the mean time, I’ve now had extensive conversations with three of my congressmen, all of whom get it, including one who is deep in working on some draft legislation around it. I’ve also gotten a CU Law JD/MBA student to work with us as an intern to help put some substance around the approach and proposal. I’ve also been taken to task by some folks who think I’m naive, misguided, or simply are against increasing the number of legal immigrants into our country.
I have no idea how to address the entire immigration issue in the US. However, I strongly believe that we should make it easy for people to start new entrepreneurial ventures in the US. As a result, the EB-5 is an interesting visa to consider. The simple version is that if a foreign national invests up to $1,000,000 in a US company that creates at least 10 jobs, the foreign national can apply for the visa. This seems backwards to me. Rather than grant the visa to an investor, let’s grant the visa to the entrepreneur. If we change the EB-5 so that foreign nationals starting US companies that are backed by qualified US investors can apply for the visa it seems like we can preserve the general construct of the EB-5 while applying it to a more compelling recipient (the entrepreneur).
From the various conversations I’ve had, the biggest issue – not surprisingly – is figuring out ways to create an efficient and fair evaluation process for the visa that does an effective job of preventing people from gaming the system. In thinking this through, it seems like there are two goals: (1) use as much existing SEC and IRS filings as possible as the basis (so as to not create new filings) and (b) create appropriate thresholds to make the definitions and parameters easy to test and validate.
Following are some items for discussion. This are not a firm proposal, but rather my synthesis of a bunch of different conversations, including an attempt to synthesize the comment threads on the various blogs posts such as Fred Wilson’s that I’ve seen. I encourage an open discussion of these – please tell me why these are constructs or thresholds that won’t work and feel free to suggest better ones. I’m definitely still in “figuring this out mode” and the more input I get – both positive and negative (preferably constructive) is really helpful.
Proposal: An entrepreneur applying for a StartupVisa can be sponsored by a qualified VC or a qualified Super Angel who is investing at least $100,000 in an equity financing of at least $500,000.
Definition of a Qualified VC: Whenever a VC raises a fund, they have to file a Form D indicating that they are a venture capital company and disclosing the amount of funding that has been committed to them. For purposes of the StartupVisa, this form can be amended to include the disclosure that the VC firm is a US-entity comprised of US citizens. To eliminate the chance that anyone can set up a VC fund for this purpose, the VC fund needs to have a minimum amount of capital commitments (say – $5m).
Definition of a Qualified Super Angel: For angels, let’s define a category called “Super Angel”. A “Super Angel” is an accredited investor (as per the SEC accredited investor rules) and has to have made at least five angel investments in the preceding three years totaling at least $250,000.
Duration: The StartupVisa is valid for two years.
Renewal: For the StartupVisa to be renewed, the company needs to either (a) create 5 new jobs every two years, (b) raise at least $1m every two years, or (c) generate at least $1m in revenue and be profitable.
Ok – have at it. What’s wrong with these parameters? How can the system be gamed? What am I missing?
Defrag 2009 is happening in Denver on November 11th and 12th. As this is Defrag’s third year, I can say with great confidence that it will be an amazing experience. I’ve watched Eric Norlin orchestrate two Defrag’s and one Glue conference and he is a master at the small, intimate, high quality tech conference. The simple metaphor for Defrag versus all of the other tech conferences that exist can be summarized in one question: “Would you rather eat at TGI Fridays or the family owned restaurant, where the owner brings the food to your table?"
The agenda is taking shape on the web site. As is Eric’s style he’ll keep fiddling with it until the actual event. He recently wrote a post about the keynotes which include Andy Kessler, Lili Cheng, Chris Sacca, John Winsor, Scoble + Bruggeman, Feld + Wilson + Lindzon + Ehrenberg + Tybur, Paul Kedrosky, and Searls + Locke + Levine + Rangaswami. Go read Eric’s post for more details including info on the “fragments’” from Stowe Boyd, Anil Dash, Kevin Marks, Jeff Dachis, and Kim Cameron. Or look at some of the topical explorations being led by Andrea Baker, Dan Neely, Micah Baldwin, Maggie Fox, and Laura Fitton.
Eric always has a bunch of tricks up his sleeve as the event gets closer – I know a few of them and they are doozies – but am also pleasantly surprised every year. In an email today explaining one of them to me, Eric said “this year’s Defrag is going to make the other Defrag’s look like child’s play on the content side.” And – for any of you that attended the past Defrag’s, you can confirm that the content was some of the best that is out there.
Eric is running an end of September discount – if you register today or tomorrow and use the code septspecial1 you will get $300 of the normal registration price. This is the cheapest it gets so if you are thinking about coming, decide now and register.
All four of the Foundry Group partners will be there – come join us for two great days.
I’ll start with the lesson that I learned: Always make sure your license plate matches your registration and insurance forms that you keep in your car and that these are the same as the information the DMV has in their database.
Here’s the story. I was driving home last night around 10:30pm on the road to Eldorado Canyon. I drive this road hundreds of times a year and have trouble staying at the speed limit, especially when it’s late, no one is out, and I’m in a mellow happy mood. I was listening to the XM Chill station (my favorite radio station) and reflecting on the day.
As occasionally happens, I noticed flashing red and blue lights in my rear view mirror. After the initial exclamation of “fuck” and a brief adrenaline rush, I slowed to a stop and pulled over to the side of the road. As I sat in my Range Rover, I pondered how excruciatingly bright the policeman’s floodlights were.
The policeman marched up to my car. As I’ve been through this drill before I handed him my drivers license, registration, and insurance form. He asked if I knew why he had pulled me over. I suppressed the sarcastic thought that immediately rolled through my head and said “I imagine I was going too fast.” He asked if I knew how fast I was going. I replied “I have no idea.” He asked me where I was going. I responded “home – I live about three miles from here.” He asked if there was anything he should know. I pondered this for a second and said, “No. I’m just heading home from dinner. I didn’t have anything to drink if that’s what you are asking.” (I hadn’t). He took this in stride and said “Just checking – I clocked you going 63 in a 45.” In an effort to be cute, cuddly, and charming, I replied “I have no excuse for that – I just wasn’t paying attention.”
He took my documents and went back to his car. Fifteen minutes later I was wondering what he was working on when he came out of his car and approached mine very purposefully. He asked, “Is this your car.” I responded, “Yes?” He said, “The license plate is registered to a 1990 Blue Ford Pickup truck. Do you own one of those?” My first response was going to be no, but then I realized we do own a 1990-ish Blue Ford Pickup truck that we use to plow our road (I never drive it because Amy doesn’t allow me to plow.) I explained this to the officer. He then asked, very directly, “Are you sure.”
At this point, I was really perplexed. I looked him directly in the eye (there hadn’t been much eye contact up to this point because the flashlight he was shining in my face was excessively bright) and said “Yes. I’d be happy to call my wife Amy who is at our house to confirm.” He noticeably relaxed and said, “Ok – let me tell you what’s going on.”
He started by explaining that in most situations at this point I’d be in the back of his police car handcuffed on my way to jail after having a gun drawn on me and told to get out of the car and put my hands on my head. He saw the shocked look on my face and told me not to worry – that he’d decided the car I was in wasn’t stolen based on the documentation and my answers to his questions. Apparently the license plate on my car was for a 1990 Blue Ford Pickup. And while the registration number for the Range Rover had a similar license plate, it was off by one letter. Luckily, both cars were registered to Amy (my wife) instead of me and my drivers license had the same address on it.
He said when he first brought up the DMV data, he almost arrested me since my “1990 Blue Ford Pickup” had turned into a “2007 Black Range Rover” which is a normal type of stolen car scenario. The only thing that stopped him from doing this was that he noticed my address was Eldorado Springs, which matched the small town in which he had pulled me over. Since this didn’t match the stolen car scenario, he dug deeper (hence the 15 minutes) and ultimately decided that I probably hadn’t stolen the car, but instead either had the wrong license plate on it or the DMV had made an error. Apparently I answered his questions consistently enough that he was comfortable that I wasn’t a car thief.
By this point he wanted to make sure he explained the problem clearly enough so he escorted me to his car and showed me the DMV record he had pulled up. I wasn’t processing much of what he was saying at this point since I was just happy to get whatever ticket he was going to give me. I also realized Amy was probably getting worried since I was now at least 30 minutes later than I said I would be so when I got back to my car I sent her a quick email.
A few minutes later my new friend the policeman came by with a ticket (yes – after all that – he gave me a ticket.) He was almost apologetic about the ticket at this point, but said he felt compelled to give it to me since I was speeding. Being in no mood to argue, I thanked him for the ticket and also thanked him for doing the extra bit of research that kept me out of jail.
Not surprisingly, it took me a while to fall asleep when I finally got home. This morning we are trying to figure out if it’s a license plate error or a DMV error (it appears to be a DMV error.) Hopefully I don’t have to visit a special part of hell to get this resolved.
The Startup Visa movement is picking up a lot of speed. I’ve had more positive conversations about it than I have about any other government related thing I’ve been involved in or worked on in the past few years.
David Binetti and the gang at @2gov have set up a way for anyone to make a $50 contribution to the Startup Visa effort. This is an anonymous donation and you have to be a US Citizen to make the donation – just go to the contribute page. If you want to contribute more than $50, just email email@example.com.
Thanks in advance for any and all support.
A few weeks ago I wrote a post titled An Angel Investor Group Move That Makes Me Vomit. In the post, I lambasted the practice of charging entrepreneurs to pitch to an angel group for funding. I think this is completely backwards – the angel group members should cover all the costs and the entrepreneurs should not be charged.
Last week David Cohen (the founder of TechStars) wrote a post titled An offer to Funding Universe. On 9/30, Funding Universe is having one of their CrowdPitch events in Denver. The were originally charging $125 to present – David welcomed Funding Universe to Colorado and offered to pay the presentation fees for half the companies if Funding Universe covered the other half.
Funding Universe responded to David’s offer by having the Pitching Fee Removed! Nice job guys.