Last month, President Obama signed the JOBS Act, which is aimed at helping startups more easily raise funds. Young, high-growth companies are now expected to better thrive, create more jobs and grow our economy. Obama described it as a "game changer." Silicon Valley's high-tech and venture capital industries are popping the champagne.
I couldn't be more disappointed. Nothing in the act addresses one fundamental barrier to entrepreneurship: the immigration obstacles facing foreign entrepreneurs. Their visa restrictions are nearly insurmountable. Highly skilled immigrants are currently struggling to get simple H-1B visas to start up their companies here, and it could take some highly skilled workers 70 years to get a green card.
Fact is, foreign entrepreneurs are the lifeblood of the startup community. Immigrants are 30 percent more likely to start companies than Americans. Nearly 20 percent of Fortune 500 companies were founded by immigrants and generate $1.7 trillion annually. In 2005 alone, immigrant-founded U.S. engineering and tech companies employed 450,000 workers. No doubt, foreign entrepreneurs are key to our economy.
Case in point. Facebook recently purchased Instagram for $1 billion. Instagram's co-founder, Mike Krieger, is a Brazilian native who came here on a student visa to attend Stanford.
The good news is, like Krieger, the majority of foreign entrepreneurs come here as ambitious students. The bad news is we can't keep them here. Although the immigration stars aligned for Krieger, most are not so lucky. Spurned by our antiquated, bureaucratic immigration system, some of the brightest minds in the world are literally sent packing, taking their talent, ideas and U.S. training with them. We're creating a cadre of formidable competitors.