Watch the documentary I filmed at Startup Chile. I was on assignment for Thomson Reuters Venture Capital Journal.
HEY DC, LISTEN UP: We Are The Voice of Startups in Silicon Valley
Engine Advocacy wants to give Silicon Valley startups a voice in Washington.
By Boonsri Dickinson
Today, big companies spend a lot of money on lobbying. In 2011, computer and Internet companies spent $91.5 million lobbying, according to OpenSecrets.org, with Verizon, AT&T, Google, and Microsoft among the biggest.
But there's no group to represent the concerns of the thousands of smaller Silicon Valley startups that are trying to become the next Google.
Engine Advocacy aims to fix that.
More than 300 startup entrepreneurs and venture capitalists came to a kick-off party last night to learn about Engine Advocacy's mission. While the business model and possible membership service are still being hashed out, the group is growing.
Josh Mendelsohn from Hattery Labs, one of the firms sponsoring Engine Advocacy, told us the most pressing issues facing entrepreneurs:
- Legislation like the Stop Online Piracy Act (SOPA) and PROTECT IP, which could threaten companies with being shut down and mess with the fabric of the Internet.
- Immigration: fixed allocation on visas for high-skilled immigrants based on countries should change.
- Bandwidth: The AT&T merger and data caps may make the U.S. fall behind. "Innovation is only as good as the spectrum" Mendelsohn said. "The government licenses it to who will bid the most money. But the highways that we transmit information should be more open and accessible."
Tim O'Reilly said "it's about time Silicon Valley got its act together and started explaining technology to congress."
Venture capitalist Albert Wenger of Union Square Ventures, who was visiting from New York City said, "It's better late than never. The reality is the tech industry -- startups as a group -- hasn't had a voice. People launching services and getting products out don't have time to go to congress to appear on panels and argue their case."
The immigration issue is on the mind of Luis Arbulu (right) who moved here from Peru on a Fulbright Scholarship. After he attended college in Kansas, he was hired on by a major engineering consulting firm Black & Veatch and had no problem getting a visa. However, the trouble occurred when he wanted to be an entrepreneur and create jobs here.
"It's complicated if you want to switch jobs and impossible to start your own company. I started a social dating website, but I couldn't work for my own company because it was too small," Arbulu said regarding visa restrictions.
Now that he is a U.S. citizen, he was able to play an active role in starting Hattery Labs. "If people can get married for visas, why can't people start a company?" Arbulu asked.
Independent policy consultant Micah Schaffer, who was an early employee of YouTube and a founding member of the operation team, thinks SOPA will introduce new uncertainty. At least with the Digital Millennium Copyright Act (DMCA) of 1998, there was less ambiguity, he explains, and startups could mitigate their risks by following the rules outlined by the act.
"This could open the door again -- and this time, entire domains can be shut down," Schaffer said.
As far as tapping the startup community in San Francisco, the chief operating officer of Causes Matthew Mahan said it's a good thing Engine Advocacy started locally. "Helping to organize startups to have a unified voice for same policy in Washington DC hits close to home. This is what we do for hundreds of thousands of causes on our platform that organizes for social and political change."
It's CRAZY That The U.S. Kicked This Startup CEO Out Of The Country
By Boonsri Dickinson
Cruisewise CEO Amit Aharoni is the face of an immigrant entrepreneur in Silicon Valley, and knows what it feels like to be kicked out of the country after his visa application was denied.
He had no choice but to pack his bags and leave his company Cruisewise behind. While Aharoni flew to Canada and stayed with a friend, he continued to keep tabs on his San Francisco team by holding meetings via Skype calls.
Aharoni admits he was lucky, even though the whole ordeal lasted six weeks.
While not all cases of visa denials make national headlines, Aharoni went through something all foreign-born innovators must face if they hope to start companies in the United States and create jobs. They must apply for a visa, and wait to see if it is accepted or denied.
For every high-skilled visa, five additional jobs are created. Yet, there's a disconnect in the visa process. Usually immigrant entrepreneurs have to be sponsored by a family member or work for an American company, so they can get permanent residency before starting their own company.
Or entrepreneurs can apply for the H-1B visa, like Aharoni did. It allows workers sponsored by employees to fill jobs in "specialty occupations" that require a B.A. or higher.
"The H-1B is designed to match foreign workers to the needs of American companies. Until now, this visa has not been available to sponsor the self-employed, including founders and owners of companies," according to the Partnership for a New American Economy.
The United States only gives out 65,000 H-1B visas a year and another 20,000 to those who graduate from U.S. universities. Last year, the visas ran out in October or November.
Aharoni is worried the U.S. could start losing talent to other countries, if visa denials persist and barriers for starting a company continue to remain high.
"Many countries such as Singapore and Chile are removing barriers to come and live in those countries. They realize this is how you create jobs. The U.S. is doing the exact opposite. They have a pool of talent that wants to come to here. Before 2008, the U.S. didn't really need to think about how to be competitive for talent. Now that it is fighting to keep jobs, it should be welcoming talent," he said.
Cruisewise had a much better experience in Chile: it was the first team to go to the Startup Chile incubation program, which offered $40,000 and a temporary 1-year resident visa for foreign talent.
"It's a nice contrast to what the U.S. is doing," Aharoni said. "We were very early stage back then, with just an idea and no resources. The program provided us the resources and runway we needed so that we could focus on one thing - building the prototype. That same prototype eventually allowed us to raise money when we came back to the US in January 2011."
Cruisewise closed a round of $1.65 million in April 2011 from Index Ventures, NEA, SV Angels, and among others. It launched in the U.S. on February 14. And Aharoni has had time to settle back into his old desk in his San Francisco office. However, not everyone has a happy ending like Aharoni.
Today, Aharoni received an email from an immigrant entrepreneur who is experiencing what he just went through: Karishma Baijal, VP of marketing for Weddington Way, is booking a ticket back to India after she was denied a visa because the position she was applying for wasn't considered a specialty occupation. Weddington Way raised more than $2 million and is generating $2 million in revenue, and while she played a huge part in that growth -- that didn't matter in the final decision.
"My reason for the denial was on the same basis as Karishma's denial," Aharoni said.
Initially, the decision was made based on the fact that a CEO at Cruisewise shouldn't require an advanced degree. "But it's a grey area," he said. "I never that it would ever be an issue. My company was legitimate, I secured investment, and created jobs. But I was forced to leave the country."