A proposal to encourage foreign entrepreneurs to start businesses in the U.S. has strong support from domestic business owners who presumably would find themselves in competition with at least some of the immigrant-led startups.

One of them is Garrett Johnson, CEO of Sendhub, a Menlo Park, California-based mobile communications startup. Johnson, a former Capitol Hill staffer, was recently part of a group that went to Washington to lobby for the proposed legislation. Johnson’s rationale for backing the bill—labeled Startup Act 3.0 for its similarity to two bills that failed to pass previous sessions—is straightforward.

“My co-founder was born in the U.K. and my company would not exist if it were not for his amazing contribution in building our company,” Johnson says. Johnson believes the U.S. should welcome foreign-born entrepreneurs like his co-founder, Oxford-educated former British Army officer Ash Rust, for their ability to help create and grow businesses on these shores.

Green Cards for Employers

Startup 3.0 would allow 75,000 visas to be issued every year to foreign entrepreneurs like Rust. To qualify, entrepreneurs would have to raise $100,000 and hire at least two employees within a year and at least five in the next three years.

Starting businesses that hire employees will help the overall economy in addition to helping individual U.S.-born entrepreneurs who tap imported talent to get their own businesses off the ground. That, at least, is the view of the many organizations that also support Startup 3.0.

“Right now we have people coming to this country, studying hard and leaving here afterward,” says Joe Vidulich, public policy manager for the Northern Virginia Technology Council, a Herndon-based organization with 1,000 member companies employing 200,000. It would be smarter to keep those foreign-born would-be entrepreneurs here and encourage them to start businesses that would hire more people, Vidulich argues.

The Northern Virginia Technology Council is joined in its support by a long list of other business groups. Some endorsers of the proposed legislation are national organizations like the National Small Business Association, the Computer and Communications Industry Association and the Angel Capital Association. Others are local Chambers of Commerce from the likes of Kansas City and Austin and as well as the Silicon Valley Leadership Group and the Tampa Bay Technology Forum.

The common thread is a desire to retain and make the most of foreign-born entrepreneurial technical talent creativity, Vidulich says. “Many in our industry look at it as spurring innovation,” he explains. “It brings about new ideas, and that brings about new products and new capital.”

Supporters point to competitive efforts by the likes of Canada, the United Kingdom and Chile to attract foreign entrepreneurs to their own shores. If the U.S. doesn’t step up its game, they warn, America could lose entrepreneurial energy to more welcoming nations.

The Importance of Being Foreign

Backers of Startup 3.0 say 40 percent of the companies in the current Fortune 500 were founded by first- or second-generation immigrants. A Kaufman Foundation report last fall found 24 percent of engineering and technology companies founded in the United States between 2006 and 2012 had at least one key founder. Among Silicon Valley firms, the figure was 44 percent.

The authors of the Kaufman report also warned, however, that after a period of rapid growth in immigrant-led startups, the rate of growth in their numbers has stalled. “The study found that, for the first time in decades, the growth rate of immigrant-founded companies has stagnated, if not declined,” they wrote. For instance, in 2005, 52 percent of Silicon Valley startups were immigrant-founded, significantly more than today’s 44 percent, the report said.

There's more to the immigration aspects of Startup 3.0 Act than entrepreneurial visas. The act would also provide for conditional green cards—immigration documents providing for permanent resident status—for foreign students who have earned an advanced degree in Science Technology Engineering or Math (STEM) from a U.S. institution. This, too, is widely supported by entrepreneurs and business groups.

Tough Road to Passage

With all its support, however, Startup 3.0 has only modest chances for success. That’s because the issue is wrapped up in the broader one of comprehensive immigration reform. Despite support from Democrats and Republicans in both houses of Congress, it is opposed by legislators demanding action on undocumented workers and border security. Thus, the act is unlikely to pass unless as part of a larger bill that overhauls the entire immigration system.

That’s not out of the question, although bipartisanship is dicey in Washington today. Vidulich thinks the legislation offers a rare opportunity to do something that works for almost everyone. “I don’t see any downside here,” he says. “What this does very plainly and simply is allow people who want to create jobs here the ability to do so. That can’t be a lose for us.”

At Sendhub, Johnson and his foreign-born entrepreneur partner are doing their best to make that win a reality. “We are hiring,” he says. “Our revenues and users are growing 40 percent month over month. These are the kinds of companies that U.S. policy should be encouraging.”

What do you think: Will legislation like this ever be passed? Please tell us in the comments.

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