• USCIS’ Parole for Entrepreneurs – Your Frequently Asked Questions

    Hurray for USCIS, who worked quickly to release the Final Rule for Parole for Entrepreneurs.  The rule is officially published on January 17, 2017 and will go live in 180 days – July 17, 2017.

    A few highlights and thoughts on the Final Rule before we dig into the common questions that I know are on your minds.

    Overall, USCIS was quite thorough in reviewing over 763 comments (including mine) received over a 45-day comment period.  It took USCIS about three months to review and issue the Final Rule.  USCIS lowered the threshold private investment amount from USD $345,000 to USD $250,000 and expounded on the “alternative” criteria in greater detail.  This was a sticky point on my comment so I’m glad USCIS indulged me.

    In sum, the Parole option will be attractive but only for a small number of entrepreneurs.  Many will not qualify because funding a startup can be tricky and very difficult.  Funding a startup with “qualified” investors is even trickier.  For the brave and lucky, it’s worth a shot.  The fact that the Entrepreneur is required to depart the U.S. (if they are already here), and then reenter the U.S. is inconvenient, but a necessary procedure.  Although USCIS declined to publish its applicant data (minus identifying information), it did take my comments under consideration.  I suspect that the annual number of applications will exceed the estimated 2,940 applicants, but the number of applicants approved will be much lower.

    Parole is but a salve until Congress commits to real meaningful immigration reform.  For now, here are some frequently asked questions (FAQs) about Parole for Entrepreneurs.  We’ll be hosting a webinar, open to all entrepreneurs, interested in learning more.  Sign up here.


    When will USCIS start accepting Parole Applications?

    The rule goes into effect, and USCIS will begin accepting applications on Monday, July 17, 2017.

    What Does Getting “Parole” Actually Mean for an Entrepreneur?

    Parole is the legal immigration term that allows an individual to enter the U.S., with the permission of USCIS, without having to go through the official process of obtaining a visa from the Department of State while bypassing the requirements applicable to Inadmissible Aliens.  Read about the difference between Parole and a Visa.

    I’m Already in the U.S. in Another Nonimmigrant Status; Must I Depart the U.S. and Reenter Seeking Parole?

    Yes, you must depart the U.S.  USCIS had indicated the rules for Parole require applicants to depart and then reenter.  Although USCIS is aware of the “Parole in Place” option, it declined to allow “Parole in Place” for Entrepreneurs.

    What Are the Limitations for Using Parole?

    Yes.  When entering the U.S. on Parole, an individual is not officially “admitted” to the U.S.  There is no “status” issued.  A Parole entry is a legal way to enter the U.S. but it is not considered an official admission to the U.S.  The individual must either renew their parole period prior to its expiration, or depart the U.S. before the parole period ends.  In this sense, travel is somewhat restricted during the parole period.   Entrepreneurs should not depart the U.S. in the middle of the parole period unless they are willing to reapply for Parole in order to reenter the U.S.

    How Does an Entrepreneur Qualify for Parole?

    The Final Rule outlines some changes from the Proposed Rule (released September 2016).  The update criteria are:

    1. Startup Entity must be formed within the last five (5) years
    2. Entrepreneur must own as least 10% of the startup
    3. Entrepreneur must play an active/central role in the startup’s operations (mere passive investor is not sufficient)
    4. No more than three (3) entrepreneurs for any one startup may apply for Parole
    5. The startup must have received significant funding from either:
      • A qualified Investor(s) of USD $250,000 or more, within 18 months immediately prior to application; or
      • Government grant of USD $100,000 or more, within 18 months immediately prior to application; or
      • Alternative criteria that the company will provide a significant public benefit to the U.S.
    What “Alternative Criteria” Can Be Used to Qualify for Parole?

    USCIS has indicated a number of factors, including, but not limited to:

    • The number of users or customers;
    • The revenue generated by the start-up entity;
    • The social impact of the start-up entity;
    • The national scope of the start-up entity;
    • The positive effects on the start-up entity’s locality or region;
    • The success using alternative funding platforms, including crowdfunding platforms;
    • The applicant’s academic degrees;
    • The applicant’s prior success in operating start-up entities as demonstrated by patented innovations, annual revenue, job creation, or other factors; or,
    • The selection of the start-up entity to participate in one or more established and reputable start-up accelerators or incubators.
    Can You Renew Parole for Entrepreneurs?

    Yes, but the total amount of time allotted for one entrepreneur is a total of five (5) years, from the date the first parole period was initially issued.  Any time that is spent outside the U.S. is counted as well.

    What Are the Criteria to Renew a Parole for an Entrepreneur?

    In addition to submitting the appropriate documentation and application fees timely, entrepreneurs must satisfy these criteria:

    • The entrepreneur must continue to operate the startup in an active role
    • The entrepreneur must own at least 5% of the startup
    • The startup must have sustained growth during the Parole period, via
      • Having received additional investments or grants (additional USD $500,000)
      • Generate revenue at least USD $500,000
      • Created at least five (5) full-time jobs in the U.S.
      • Or alternatively, provided a substantial benefit to U.S.
    Can Family Members Apply for Parole as Dependents?

    Yes.  Spouses and unmarried children under 21 years may accompany the Entrepreneur to the U.S. on Parole.  Spouses and children must also submit in advance of entering the U.S., their own applications for Parole.

    May Family Members Work While on Parole?

    After entry into the U.S., spouses may apply for a work permit but children are not eligible to apply for a work permit.

    What Happens When Your Parole Ends?

    Entrepreneurs may extend their parole period for an additional 2.5 years (30 months).  After that period, they must depart the U.S.  Entrepreneurs may apply for a non-immigrant work visa, such as an E-2, E-3, H-1B, O-1 or TN, if eligible.  A departure is most certainly required at some point in the future.

    What Documents Are Needed to Submit a Parole Application as an Entrepreneur?

    USCIS has designated a new form, Form I-941, Application for Entrepreneur Parole.  (This form should not be confused with IRS Form I-941, Employer’s Quarterly Federal Tax Returns.)  Although a draft form was released in September 2016, due to the recent updates in the Final Rule, the new form has not yet been finalized.  Once the form is finalized, it will be available online at USCIS Forms under Form I-941.

    Additional, supporting documentation regarding each criteria will be needed along with an application fee of $1,200 and biometrics fee of $85.

    Additional fees and forms will apply for dependent spouses and children.

    What If I Have More Questions?

    We’re hosting a webinar very soon to answer additional questions on Parole for Entrepreneurs.  Click here to sign up for more information on how to attend the free webinar.

  • How to Decipher and Read the U.S. Visa Bulletin

    Every month, around the end of the first week, the Department of State issues a Visa Bulletin to inform the public how many immigrant visas have been issued (i.e.: how many greencard “slots” have been issued.”)  The charts on the visa bulletin are a bit confusing because there are many different categories and countries.  Sometimes, the indications move backwards (“retrogress”) instead of moving forwards, thereby making wait times for a greencard even longer.

    How exactly does one decipher and read the Visa Bulletin?  While there are plenty of articles, there are few visual aids.  We’re attempting to tackle this task today!

    Read Me First: The Visa Bulletin indicates when a foreign national may either submit their greencard application, or, if the application has already been submitted, when the government is currently reviewing that application.  “When” this occurs is based on when the underlying immigrant petition was initially submitted to USCIS.  That date is considered a “priority date” and will be notated on the immigrant visa petition approval.

    Step 1: Visit the Department of State’s Visa Bulletin webpage.  There are usually links to the current month and the next month’s chart.  There are also links to archived bulletins from past years.  Select the link you wish to inspect.

    US Visa Bulletin

    Step 2: Locate your “Preference” charts.  The Preference is the basis for which the applicant is eligible to apply for a greencard.  There are three preferences:

    1. Family Preference: when a relative sponsors you for a greencard
    2. Employment Preference: when you are eligible to apply for a greencard through employment purposes
    3. Diversity Lottery Preference: when you are eligible to apply based on the Diversity Lottery. Read more about it here.

    Today’s article focuses on the second preference based on employment charts.  (You’ll notice there are two charts under this preference.  Chart A. Final Action Dates is normally the default chart.  We’ll address the issue of why there are two charts at Step 4).

    Step 3: Locate your Employment-Based (EB) preference category.  For example, let’s say your employer filed an immigrant petition based on the EB-3 category.  Then your preference category would be “3rd”.  Then, locate the country you were born.  The intersection where the preference category meets the country of birth is the visa date the government is current reviewing greencard applications.  In the example in the illustration below, an Indian national who is 3rd preference category would have a visa date of March 8, 2005.  This means that if the priority date on the Indian national’s I-140 immigrant petition approval notice is March 8, 2010, the Indian national would be waiting another five years before her priority date will be current and she will be eligible to submit her greencard application.  (Note that if she had already submitted her greencard application, then the government will review her application once her priority meets or precedes the visa date indicated on the Visa Bulletin.

    How to Read US Visa Bulletin

    Q:  What if the intersection date say’s “C”?  “C” stands for current.  Priority dates that are current means that applicants who submit their greencard applications need only to wait as long as it takes an officer to review the case.  They applicant doesn’t experience the long delays that are found in other preference categories.

    Q: Why is 1st Preference Category current for all country nationals?  This is usually the case because the number of applicants in this category seldom exceed the visa quota imposed in this category.  In other words, when there are plenty of visas allotted for that category, and the number of applicants are low, the visa dates are almost always current.

    Q: I checked last month and my priority date preceded my preference category date.  This month, when I checked again, I noticed the date moved backwards.  What does this mean?  When visa dates move backwards from the prior month instead of advancing, this means that visa numbers “retrogressed.”  This is a calibration method by the Department of State.  The Department of State controls the Visa Bulletin but both the Department of State and USCIS issue visa numbers.  As a result, USCIS must report to the Department of State how many visa numbers were by USCIS so that the Visa Bulletin can be adjusted.  Sometimes, part of that adjustment means that visa dates retrogress in order to ensure the correct amount of visa numbers are issued for the fiscal year in that preference category.  (There is a finite number of visas that can be issued per category.)

    Step 4: Why are there two different Employment-Based charts and what do they mean?

    vb3

    Back in the days when only one chart was used, Chart A. Final Action Dates was the only chart.

    Chart B. Dates for Filing was the delayed implementation of President Obama’s Executive Action recommendation in November 2014 for the Department of State to modernize its greencard backlog.  It was first introduced back in September 9, 2015 for October 2015’s Visa Bulletin but quickly created a lot of confusion.  A revised October 2015 Visa Bulletin was issued on September 25, 2015.  The basis for the second chart was to equalize the amount of time individuals would generally have to wait to submit their greencard applications.  USCIS process applications from individuals in the U.S. waiting to apply for their greencards whereas the Department of State processes applications from individuals waiting.  The wait times for either queue were not equitable so Chart B was meant to equalize the wait times.

    Q: How do I know whether I should use Chart A or Chart B?  If you are waiting in the U.S. and planning on “adjusting your status”, then you may use Chart B only when USCIS had indicated it is okay to do so.

    Step 5: You can determine when USCIS says it’s okay to rely on Chart B usually by mid-month of each month. USCIS will update is visa bulletin instructions webpage and instruct whether to use “Final Action Dates” chart or “Dates for Filing” chart for both the current month and the next month.  (See screenshot below.)

    Final Action or Filing Date Chart

    So there you have it; a very easy tutorial on how to read the Visa Bulletin.  If you want more tips like this, subscribe to this blog!

  • Six Nobel Laureates are U.S. Immigrants: Outstanding Researchers!

    The Nobel Foundation awarded Nobel prizes to six researchers in the U.S., all of whom are immigrants.  It is self-evident that significant research and discovery is not and should not be bound by borders.  In fact, because immigration has been such a hot topic during this year’s presidential campaign, some of the Nobel Laureates have spoken out.

    Nobel Laureate in Chemistry, Sir J. Fraser Stoddart, a native of Scotland, United Kingdom, immigrated to the United States and become a naturalized citizen in 2011.  He teaches at Northwestern University but has a historic career as in chemistry.  Sir Stoddart made the following comments during a recent interview:

    I think the resounding message that should go out all around the world is that science is global … as long as we don’t enter an era where we turn our back on immigration. … It’s particularly pertinent to have these discussions in view of the political climate on both sides of the pond at the moment. … I think the United States is what it is today largely because of open borders.

    Professor Duncane Haldane, Nobel Laureate in Physics this year, currently teaches at Princeton University.  As a native of the United Kingdom, he commented that the U.S. immigration process was a “bureaucratic nightmare for many people” despite the fact that the U.S. is one of the most desirable places for researchers to conduct and obtain funding for their research.  “There’s a tradition of funding very fundamental research without regard for it being ‘useful,’”.

    To date, the United States remains in the lead with the most number of Nobel Laureates.  Of those Laureates, 40% are immigrants to the U.S. based on an analysis conducted by Stuart Anderson of the National Foundation for American Policy in June 2014.  Mr. Anderson largely credits the openness of the scientific community to immigrants based on the passage of the U.S. Immigration and Nationality Act of 1965 (which removed discriminatory quotas against Asian immigrants) and the Immigration Act of 1990 (which increased employment-related permanent visas).

    While some of the rise in indicators like immigrant Nobel Prize winners reflects an overall increase in the reputation and capability of American institutions and researchers post-1960, a greater openness to immigration helped make the United States the leading global destination for research in many different science and technology fields, including computers, cancer research and many others.

    Other Nobel Laureates in Physics include Professors David Thouless of Yale University and Michael Kosterlitz of Brown University, both natives of the United Kingdom; Nobel Laureates in Economics are Professors Oliver Hart of Harvard University, a native of the United Kingdom as well, and Bengt Holmström of the Massachusetts Institute of Technology, a native of Finland.

    2016 Nobel Laureate U.S. Immigrants chart

    Of course, honoring U.S. Nobel Laureates who are immigrants isn’t a new thing as there are plenty of articles that cover this each year, including this article.  It happens every year, when the Nobel Foundation announces it winners.  Invariably, the winners are immigrants who have moved to a new country to seek out better opportunities.

    One of the categories to immigrate to the U.S. permanently is the Outstanding Researcher category. While winning a Nobel Prize is an automatic qualifier, a researcher who has at least three years of research experience may also meet any two of the six criteria below, in order to be considered for a fast-track towards a greencard by USCIS:

    1. Evidence of receipt of major prizes or awards for outstanding achievement
    2. Evidence of membership in associations that require their members to demonstrate outstanding achievement
    3. Evidence of published material in professional publications written by others about the alien’s work in the academic field
    4. Evidence of participation, either on a panel or individually, as a judge of the work of others in the same or allied academic field
    5. Evidence of original scientific or scholarly research contributions in the field
    6. Evidence of authorship of scholarly books or articles (in scholarly journals with international circulation) in the field

    Curious about the Outstanding Researcher categories for a greencard or other categories?  Send us your comments or reach out!

  • Comment on USCIS Proposal for Entrepreneur Parole

    Submitted to USCIS on October 6, 2016.

    I am Ann Cun, Business Immigration Attorney and founder of Accel Visa Attorneys, PC based in the Bay Area.  I have worked with numerous startup founders in helping them navigate alternatives to the H-1B, such as E-2s, O-1s, L-1s and EB-1A visas.  I have also volunteered actively with FWD.us with regards to shaping the dialogue on immigration reform and am a long time member of the American Immigration Lawyers Association.  My comments represent my own views as a practitioner.  They are based on years of anecdotal evidence, my impressions of the immigration bar’s collective experience with USCIS and the lack of meaningful immigration policies towards expanding foreign entrepreneurship in the U.S.

    I applaud the efforts set forth in the Proposal by USCIS and offer the following five points for the Service’s consideration during this comment period:

    1. Unintended Consequences: Disparate Impact on Women and Minority Founders. It is evident the Service considered multiple research studies on entrepreneurship, including those published by the Kaufmann Foundation. The Kaufmann Foundation 2012 study (See FN 66) categorizes high-growth entrepreneurship into three types: professional-user, end-user and hybrid model. In short, professional-user entrepreneurs receive external financing (private equity, VC and bank loans) at a higher percentage than end-user entrepreneurs. Professional-user Entrepreneurs also have higher rates of advanced degrees, and greater years of work experience, leading to a larger network from which to build. Professional-user Entrepreneurs are overwhelmingly white 87% and male 78.5%. The study shows that Professional-user Entrepreneurs report a higher percentage of revenue over time, greater revenues, higher numbers of full-time and part-time employees, as compared to their End-User Entrepreneur counterparts, who are comprised of a higher percentage of women and minorities, receive less external capital, and start their companies with personal funds at higher rate. Therefore, it is not surprising that with higher education, more experience, and a greater likelihood of receiving external funding, that the data resulting from Professional-user entrepreneurs results in higher revenue and hiring. If the Service were to extrapolate revenue and job creation as the deciding indicia for determining “potential for rapid growth”, the Service would be without fault to do so, as these two indicia appear neutral, on its face.

    However, additional studies by the Kaufmann Foundation, American Immigration Council, Small Business Administration, and the Minority Business Development Agency point out that immigrant and native women and minorities face disproportionate obstacles when it comes to obtaining external financing of their enterprises, including obstacles such as bias and discrimination.  (See also my article.)

    Although addressing the biases that exist at all levels of business financing (whether government or private equity/venture capital) is beyond the scope of this comment, the reality that immigrant women and minorities face when attempting to procure private capital financing is real. By prefacing eligibility solely on financing success procured from limited U.S. sources imposes unnecessary barriers for entry into this promising program. If the Service relaxed the financing threshold to also include additional (alternative) funding sources, so long as source of funds can be established (see my recommendations at #2 below), it would widen the eligibility pool.

    2. Revised Alternative Third Criterion for Parole.  The Proposal indicates that if an applicant partially meets either the private or public financing threshold, he/she may provide alternative documentation to demonstrate “‘reliable and compelling’ evidence of the entity’s substantial potential for rapid growth and job creation”. The Service should seriously reconsider this alternative criteria and divest it entirely from the need to partially satisfy the other two criteria.  Instead, a revised third criterion could allow for reliable and compelling evidence of any of the following, or satisfaction of two or more of the following:

    a) Other reliable alternative funding sources, either from abroad or from within the U.S., evidence of source of funding required

    b) Participation in a leading accelerator or incubator abroad, as established by press or foreign government support or backing

    c) Evidence of substantial revenues already earned, whether in the U.S. or abroad, that exceeds the Income-Related Conditions for Parole.

    d) Scope of the business and whether it is in the national interest (e.g. public benefit corporations, focused in a STEM field, etc.)

    e) Evidence of intent or engagement with U.S. entities for the duration of the initial parole period.d

    3. Data Be Publicly Available.  Although the proposal is silent on the issue, to further shape policy and to ensure transparency, making available important data from the Parole for Entrepreneurs Program is critical. Data should include the number of applications submitted, rates of issuance of RFEs, rates of denials/approvals, processing times initially and after RFE response received, along with industry types, financing amounts received at the time of filing, along with applicant demographics, at annual intervals with the goal of gauging program outreach and efficacy.

    4. Impact of Parole on Non-Immigrant Intent. The language of the proposal is unclear regarding the nature of the long-term impact the parole period would have on a foreign entrepreneur’s ability to obtain a non-immigrant visa abroad. Will the five years spent in the U.S. impinge on the foreign entrepreneurs’ ability to overcome non-immigrant intent with the Department of State when applying for non-immigrant visas that do not permit dual intent?

    5. Delays in processing times. The proposal provides for no avenue to expedite an application.   Bear in mind that existing USCIS customers are experiencing lengthy delays on applications and petitions submitted to USCIS; wait times that exceed six months.  (Examples include Form I-539 Applications that have been pending for over six months with no ability to expedite via premium processing and H-1B petitions submitted in the most recent fiscal year’s lottery that are still pending despite commencement into this current fiscal year.)  What steps will USCIS take to ensure the Parole for Entrepreneur Program allocates proper resources to avoid exacerbating the backlog of existing applications/petitions?  Will USCIS dedicate one Service Center to process parole applications for entrepreneurs?  How many new staff members will the Service hire, if any, to accommodate the increase this new program?

    Thank you for your consideration.

  • F-1 Students Starting Companies; Risk or Reward?

    One of the commonly asked questions is whether an F-1 student may start a company in the U.S.

    On the one hand, USCIS rules say that F-1 students may not engage in employment “during the first academic year.”  Technically, to qualify for a work permit, the F-1 student would need to have completed a full academic year of coursework.  The most common work permit would allow the F-1 student 12 months of employment, renewable for an additional 24 months if the degree was in a STEM field and certain other criteria are met.

    On the other hand, USCIS also says that you may be eligible to start a company (so long as the work permit has been procured), if the company is “directly related to your major area of study.”  (Students in English language training programs are not eligible.)

    Um…. it’s a fuzzy gray area.  When folks ask if an F-1 student start a company in the U.S., there’s actually two components to this questions.

    What Constitutes Work?

    The first issue is whether the activities of starting up a company constitute work.  U.S. immigration law defines employment very generously.  Employment means “any service or labor performed by an employee for an employer within the United States.” The law doesn’t require payment of wages, per se.  So, if one were to startup a company while on F-1 status, one would think that it would be considered “employment”.  However, the nature of the activities may actually be exempted.  USCIS has historically allowed certain activities to be considered “non-work” activities, such as

    • Preparing the paperwork to form a company (incorporate)
    • Conducting market research
    • Hold and attend meetings
    • Raise funding through meetings
    • Conduct presentations
    • Attend conferences to network
    • Serve as a board member at a company
    • Litigate

    Getting Permission to Work

    The second issue is about obtaining legal permission to work.  Under limited circumstances, an F-1 student could apply for a work permit, with endorsement from their school.  Once that permit has been issued, the student may perform more active, day-to-day activities for the company (and get paid).  So long as the work the student will be performing is “directly to her/his degree field”, then the student has a finite amount of time to get their business up and running so the company is in a position to help sponsor a work visa.

    So there you have it, very straightforward, right?

  • Difference Between Visa and Parole

    The recent announcement by USCIS for International Entrepreneurs spotlighted a nuanced concept that is relatively unknown to most: Parole.  The proposed rule for International Entrepreneurs would allow foreign nationals to enter and stay in the U.S. for an initial 2-year period (with the possibility of renewing for an additional 3 years).

    Under formal admission rules, in order to temporarily work in the U.S., foreign nationals must satisfy the eligibility requirements outlined in immigration regulations.  Once the eligibility has been met, and if they are outside the U.S., the foreign national may then apply for a visa at a local consulate or embassy.  The visa allows the foreign national to enter the U.S.   S/he is then issued an immigration status upon entry to the U.S. that is consistent with the type of visa that was issued in their passport.  (Example: if the visa was H-1B then upon entry, the foreign national’s official immigration status is “H-1B” and would be reflected on her/his I-94 arrival departure record.)  This process constitutes a “formal” admission into the U.S.

    The proposed rule to grant foreign entrepreneurs parole, rather a separate temporary visa status, is based on the fact that USCIS has a lot of discretionary powers. While the grant of parole to enter the U.S. is legal, it does not constitute a formal admission into to the U.S.  Furthermore, unlike what we normally associate in layman’s terms with a criminal being released from prison early, USCIS granting parole has nothing to do with criminal matters.  In practical terms, parolees are allowed to enter the U.S. under a completely different set of rules outlined by USCIS.  It’s legal because Congress gave USCIS discretionary powers.  There is a downside to parole though.  You are at the complete mercy of USCIS.  Any violation or failure to satisfy the eligibility requirements upon renewal and you’re required to leave the U.S.

    As an entrepreneur paroled into the U.S., the “PE-1” designation indicates you’re a parolee, it is not immigration status.  Absent specific changes to immigration laws, once the parole period is exhausted, you won’t be able to “change” your status because technically, you were never admitted to the U.S. with status.  To acquire status, one would have to depart the U.S. and be formally admitted under a valid status type.

    This is USCIS’ roundabout way of acknowledging that foreign entrepreneurs can play a critical role in promoting job creation in the U.S., but realizing that it can’t change the laws on its own, not without Congress working together.

  • USCIS Proposal Overlooks Minorities and Women

    USCIS’ recent proposed rule to allow International Entrepreneurs to jump-start their start-up venture places a steep minimum capital funding of $345,000.  If the proposal is ultimately accepted and promulgated as a final rule (which we won’t know for a few months anyway), then any foreign entrepreneur wanting to start their venture would need to meet a minimum private financing amount of $345,000 or more.  The other alternative would be to procure financing of $100,000 from a government funding source.  Seems pretty straightforward right?

    When I first wrote about this development, I commented that this proposal was truly reserved for the 1% of entrepreneurs in the U.S.  While there are some nice soundbites, the proposal makes private capital funding a deciding factor, overlooking an important fact that women and minorities are at a greater disadvantage of accessing capital.  If you can’t access capital, you would have a difficult time qualifying for the International Entrepreneur Parole proposed by USCIS.

    According to the American Immigration Council, immigrant women entrepreneurship had increased more than 40% from 2000 to 2010.  Yet, immigrant women still face significant challenges in obtaining access to capital including gender bias and discrimination according to a 2011 report.

    Of the immigrant women interviewed, many faced gender bias and difficulties securing start-up capital.  Many women also reported that banks were hesitant to provide start-up funds due to the small size of their businesses.

    The U.S. Small Business Administration commissioned a follow-up report in 2013 arriving at similar results in finding that women and minority-owned businesses encountered far greater obstacles in securing capital.

    Studies indicate that women entrepreneurs have less access to financial capital or make less use of it than male entrepreneurs. … On the equity side, women typically have limited social interaction with venture capital firms, and are under-represented among fast-growth and high-tech businesses. They also rely more on informal funding methods and self-financing.

    On the other end of the spectrum are minority-owned businesses who are disproportionately impacted by lack of access to capital, according to a 2012 report by the Kaufman Foundation.

    MBEs [Minority-Business Enterprises] rely more heavily on financial institutions for loans than all other borrowing sources combined. However, when compared to white-owned firms, MBEs typically encounter higher borrowing costs, receive smaller loans and see their loan applications rejected more often. Black- and Latino-owned MBEs are the most likely to experience such negative results. Although lower owner net worth, credit ratings, firm age, size and other risk factors account for some of the differences in access to credit, studies consistently show that black- and Latino-owned firms with identical firm and owner traits (other than race) and credit histories gain less access to bank credit than matched white-owned firms.

    The Minority Business Development Agency, a division within the U.S. Department of Commerce issued similar results in an earlier report in 2010.

    A review of national and regional studies over several decades indicates that limited financial, human, and social capital as well as racial discrimination are primarily responsible for the disparities in minority business performance. Inadequate access to financial capital continues to be a particularly important constraint limiting the growth of minority-owned businesses. The latest nationally representative data on the financing of minority firms indicates large disparities in access to financial capital. Minority-owned businesses are found to pay higher interest rates on loans. They are also more likely to be denied credit, and are less likely to apply for loans because they fear their applications will be denied. Further, minority-owned firms are found to have less than half the average amount of recent equity investments and loans than non-minority firms even among firms with $500,000 or more in annual gross receipts, and also invest substantially less capital at startup and in the first few years of existence than non-minority firms.

    According to the National Minority Supplier Development Council, minority businesses contribute to over $400 billion in revenue in the U.S. , employing over 2.2 million people.  “The lack of access to capital also trickles down to bank loans and lines of credit.”

    Moreover, it’s unclear how this proposed rule aligns with President Obama’s objective to increase access to capital to greater entrepreneurs, including minorities and women.  While the proposal offers an additional, alternate criterion for “partially satisfying” some of the funding, this alternate criterion is so vague as to make it appear more like an afterthought.  Revising the alternate criterion by making it clearer, by enumerating what those factors might be, would go a long way towards transparency.

    In addition, I would also urge USCIS to propose a rule that would enable F-1 students who seek to start their own companies more time with their Optional Practical Training (OPT), irrespective of capital funding amounts, as a supplemental program, in order to encourage entrepreneurship in the U.S.

  • USCIS Warms Up to Wantrapreneurs?

    On August 26, 2016, the United States Citizenship & Immigration Service (the federal agency that processes all immigration applications and petitions), announced it was creating a new rule for foreign entrepreneurs.  The proposed rule would theoretically allow entrepreneurs to accelerate their start-up in the U.S.  The proposed rule was published in the Federal Register on August 31, 2016, where you can leave your comments with USCIS here.  You can even read all the comments flowing in from the public here.

    The proposed rule aims to allow foreign entrepreneurs who have raised a minimum of $345,000USD in capital funding (or $100,000USD government funding) to work on their start-ups in the U.S. initially for a two-year period.  The rule will allow for a renewal of that work authorization three additional years if certain criteria are met.

    Let’s be frank here.  This proposed rule targets the 1% of entrepreneurs in a position for rapid-growth.  (USCIS thinks that approximately 2940 entrepreneurs could be benefit by this proposed regulation.)  While it’s a small concession to the many lobbying groups and the general public calling for a true Start-Up Visa, this proposed rule is not the catch-all category to allow any “wantrapreneur” to stay or come to the U.S.  It’s meant for the entrepreneur who has demonstrated a viable and soon-to-be profitable business model.  It’s a start but certainly not perfect.

    Who can blame the USCIS with this new strategy?  I mean, until Mom and Dad (aka Senate and House) can get their act together, the kids (aka USCIS) will be left to their own devices, unfortunately.  Though, with a proposed price tag of $1,480 for each application, I don’t feel too bad for USCIS.

    The bigger question is what’s going to happen to this initiative when we get a new president?