Do Venture Capitalist Care About Immigration Laws?

Question: What’s the position of the VC community in general (and yours in particular) with regards to startups with non-resident alien founders having no work permits in the US, but having valid business visas to enter US at any time?

Our Take: We canโ€™t speak for the entire VC community on this topic (but would guess it would be the same as ours), but investing in startup companies is risky enough without the specter of the INS or Homeland Security involved due to questionable immigration situations.

  • I am a little biased, being from Australia and living in New York, but that seems like a fairly silly stance and “can’t be bothered” approach. Besides from the research on immigrant contribution to startups, why would you limit your universe? Especially if the visa had already been arranged for the founder/employee and functional? Indeed from an investor standpoint, visa employees are locked into the specific company and are less likely to move jobs.

  • Jason

    I agree with you 100%. In fact, we have many successful companies that have non-U.S. executives and founders. The key to this particular post, however, is that the gentleman who asked the question admitted that he does not have a valid work visa for the U.S. He, in essence, was asking if a VC would be willing to fund him, despite his questionable visa status, of which my answer was “no.”

  • Kirill

    US immigration law is somewhat shady in this aspect. Any person may start a US company regardless of his/her visa status, but he/she may not work for this company in the US. He/she may work, but not in the US, that’s how I understand this. Is it enough to not to be on company’s payroll remains a question to the immigration lawyer.
    And having a work visa doesn’t help here, because H1-B status, for example, prohibit any job except for the original employer (“visa sponsor”). The same stands for L1.
    So the only two options are the Green Card or bootstrapping, angel money and avoiding VC at all ๐Ÿ™‚
    Thanks for the site!

  • I don’t completely agree with you, Kirill. It’s definitely a tough subject, and trying to find your (legal) way is difficult. But there are PLENTY of options as we recently found out with our immigration lawyer. H1-b bis (two companies), L1, E1, H1-b transfer, … and at the end of the day it’s more a question of choosing the right option than finding options.
    Regarding the post itself, I would link to the paragraph “UnderDog” here:
    Guess there are various views on the subject !

  • Apologies Jason, I had read it another way (that he did have a valid business visa) but didn’t realize about the work permit.
    Kirill, in terms of visa options, there is the E-2, which is basically an investor visa where you are able to get if you have invested or raised a substantial amount (>$100k) of capital in a non-consulting related (i.e. has a product and/or service not related to the founder) business.
    With the E-2 a founder doesn’t have to pay themselves. With the H1-B you can still get that visa for your company but you will have to pay yourself the prevailing wage of whatever position you create for yourself.