Vijay Vashee moved from Mumbai to the U.S. to study advanced engineering in 1974. He received degrees from Cornell University and the University of Chicago and, after several years, an ambitious young software company in Redmond, Wash., recruited him. Vashee climbed the ranks and eventually became a general manager at Microsoft.
In the four decades since Vashee immigrated to the U.S., he has invested in startups, advised entrepreneurs, founded non-profits, and served on the boards of the Fred Hutchinson Cancer Research Center and the Cornell and University of Chicago entrepreneurship councils. He also co-founded the Seattle chapter of The Indus Entrepreneurs (TiE) non-profit and served as Chairman of Bellevue College and The Foundation for Early Learning.
Suffice it to say, Vashee is a fixture in the Seattle-area’s tech ecosystem. He believes immigrants flock to the U.S. to start companies because it is an entrepreneurial haven.
“In the U.S., strangers put money behind strangers to build new companies and the U.S. also pursues the best and brightest to make this happen,” he said. “Back home, small businesses [are] typically funded by family and friends — true here also — but it has been rare for strangers to fund strangers. This, however, has changed and now China, India, Europe are all starting to do that. So the competition is increasing and some of these places have the government backing them, as well.”
But the future of that dynamic has been thrown into question with the election of Donald Trump as the country’s next president, following a campaign in which Trump promised a slate of tough immigration policies. For this story, GeekWire spoke with immigrant entrepreneurs and engineers, including many who have made a big impact on Seattle’s tech community.
Deciphering Trump’s plans
Vashee, for one, isn’t sure if immigrants in the U.S. will receive the same kind of support from their adopted government, under president-elect Donald Trump and his administration.
A wall to prevent illegal immigrants from crossing the U.S.-Mexican border was a cornerstone of Trump’s campaign. He took a hardline stance on undocumented workers but flip-flopped during the campaign when asked about skilled, legal immigrants — the very people that have become the lifeblood for many U.S. tech companies in a competitive market for tech talent.
But it seems Trump has made up his mind, if recent appointments are any indication. His proposed attorney general, Jeff Sessions, is a vocal critic of H1-B visas, which allow educated immigrants to work in the U.S. for companies like Microsoft and Google.
Trump’s newly appointed chief strategist Steve Bannon, of Breitbart News, also has a history of xenophobia that extends beyond undocumented workers to legal immigrants in Silicon Valley. “When two-thirds or three-quarters of the CEOs in Silicon Valley are from South Asia or from Asia, I think…” Bannon said. “A country is more than an economy. We’re a civic society.”
During that conversation, Trump disagreed with Bannon, saying he wanted to keep skilled immigrants in the U.S. At other times, Trump has criticized “loopholes” that allow foreign nationals to take tech and IT jobs from Americans. Some entrepreneurs and experts are concerned that a hostile climate toward immigrants could change the entrepreneurial landscape in this country.
“[It] does not help to have Bannon make statements like ‘too many Asian CEOs in Silicon Valley,'” said Vashee. “America has worked largely on merit and has been built by hungry immigrants, along with hungry U.S.-born folks. The diversity adds to the success.”
Stories like Vashee’s make up what the National Venture Capital Association (NVCA) calls “an overwhelming body of evidence [that] the entry of skilled foreign nationals benefits the competitiveness of U.S. companies in global markets, enhances the U.S. economy and complements, rather than harms, U.S. workers.”
Impact of immigrant entrepreneurs
According to a study commissioned by the NVCA, immigrants started 33 percent of U.S. venture-backed companies that became publicly traded between 2006 and 2012. Facebook, LinkedIn, Zipcar, and Tesla are among the companies in that group. As of 2013, VC-backed, publicly traded companies that were founded by immigrants had a total market capitalization of $900 billion, according to the study.
More than half of the America’s “unicorns,” a nickname for startups with valuations of $1 billion or more, were founded by immigrants, according to the National Foundation for American Policy.
“The U.S. has a history of empowering small business and entrepreneurs which are not only embedded in its laws and regulations, it’s an instrumental part of society,” said Marcelo Calbucci, a serial entrepreneur and native of Brazil who moved to the U.S. in 1998, during the dot-com boom. “Even if a country would change all their laws to be exactly like the U.S. or even better for entrepreneurs today, it still would take two or three generations to get to a level of entrepreneurship similar to the U.S.”
That transformation is in the works in many parts of the world, even if it takes several generations to come to fruition.
“The rest of the world is trying very hard to emulate Silicon Valley and more often than not succeeding,” said Vashee.
If U.S. policy is increasingly driven by xenophobia, while other countries become friendlier places for immigrant entrepreneurs, will our country be less competitive?
Yes, says Ian Wagreich, a partner at a Chicago law firm focused on business-related immigration. He believes the Trump administration’s attitude and policies will deter foreign entrepreneurs from setting up shop in the U.S. He’s seen the phenomenon first-hand with his clients.
“In my practice, I had initial discussions with several promising businesses that were looking to set up operations in the U.S. who were waiting for the results of the election, and who have now decided that they do not want to invest in the U.S. because of extreme anti-immigrant sentiment,” he said.
An uncertain future
Calbucci, a Seattle startup vet who moved to London this year, believes the entrepreneurial landscape in the U.S. will be resilient to a Trump presidency, barring a recession or other large-scale economic event that would make it harder to access capital.
“However, there will be pockets that might suffer due to more lax or stiff regulation,” he said. “Any new trade tax or new trade regulation would negatively affect hardware companies. Data security and privacy startups, on the other hand, might benefit from the public perception of government eavesdropping even more on their digital lives.”
Related: Despite flaws, Obama’s ‘startup visa’ is a step in the right direction, entrepreneurs and immigration experts say
There is at least one immigration policy that could be vulnerable under Trump. In August, President Obama asked The Department of Homeland Security to consider an International Entrepreneur Rule that would grant temporary parole to startup founders from other countries if their companies meet certain benchmarks of success. Because immigration reform failed in Congress, the White House stepped in to exercise its authority with Homeland Security in order to create an option for entrepreneurs.
That rule may not be implemented or enforced under Trump.
“The entrepreneurial parole was a proposed regulation issued by the Obama administration, and I think it is extremely unlikely that the proposed rule will be finalized under a Trump administration, given that the transition team has been targeting an extremely large number of regulations and executive actions for elimination,” said Wagreich. “That being said, the entrepreneurial parole proposal did have some bipartisan support, so I hope to be surprised.”
Tahmina Watson, a Seattle immigration attorney and author of The Startup Visa: Key to Job Growth and Economic Prosperity in America, hopes Trump will be too distracted to undo Obama’s entrepreneur rule.
“The entrepreneur rule was created through regulation, so must be undone with regulation,” she said. “My guess is that even if he wants to overturn it, it will not be quick and easy and that he is distracted with his wall. Lastly, any real businessman should see the economic merits of this rule. If he truly cares about the economy, he should leave the rule alone.”
The H-1B visa is another immigration avenue that could be threatened by Trump’s administration, particularly if Sessions’ attorney general appointment is confirmed.
“Hiring, internationally, a professional on H1 visa is very hard if not impossible already,” said Sensoria founder Davide Vigano, who immigrated to the U.S. from Italy in 1987. “For any size company having access to the best-qualified resources is important because it allows the company to compete more effectively and create more jobs. Professional visa policy should be deregulated regardless of the country of origin of the candidate. This is what will make U.S. companies even more competitive and it will act as an incentive to the U.S. education system, as well, to offer and deliver skilled candidates.”
Ostensibly, fostering a more competitive economy and a pool of skilled talent is a priority for Trump. But his comments on H-1Bs, which companies like Microsoft and Facebook use to recruit international talent, are all over the map.
He has admitted to using the H-1B to hire foreign workers but said in the same breath, “We shouldn’t have it. Very, very bad for workers.”
On several occasions, Trump has both criticized tech companies for using the H-1B visa to cheat Americans out of jobs and touted the importance of keeping skilled immigrants in the country.
For an in-depth look at Trump’s ever-changing stance on H-1B visas, see The Washington Post’s recap.
The future president’s flip-flopping stance on H-1B visas is a pretty good synecdoche for his overall immigration policy. Because it seems to ebb and flow based on Trump’s mood and the people around him, it’s difficult to predict what policies he will actually champion.
“I hope that the new administration doesn’t do anything that will impact the entrepreneurial landscape in any way, shape or form,” said Madrona Venture Group’s S. “Soma” Somasegar, a former Microsoft exec who immigrated from India in 1987. “It is really important for the U.S. to continue being a destination choice (including having the right set of checks and balances for H-1B visas) for the best and brightest people from around the world and continue doing the needful to support the innovation ecosystem in the U.S.”
