Startup Iowa’s Tej Dhawan on the recent STEM Jobs Act

Cross-posting from Tej Dhawan’s blog. Tej is a cofounder of Startup City Des Moines and part of the founding team of Startup Iowa:

The STEM (Science, Technology, Engineering, and Math) Jobs act, H.R. 6429 was introduced in the House by Rep. Lamar Smith on September 28, 2012 and passed on 11/30 in the house 245 to 139.  Iowa Representatives Braley and Loebsack voted No while King, Latham and Boswell voted in favor.  The bill was referred to the Senate and was read on 12/3 and 12/4/2012.  I spoke with Jens Krogstad of the Des Moines Register on this topic recently, and read the article and accompanying citizen commentary today.  I am disappointed in the direction the article took, as it focused on an individual’s plight instead of the larger problem surrounding the STEM worker shortage.

As the Governor and Lt. Governor of Iowa have outlined via their multi-year, statewide STEM initiative, there is a need for this state to grow the population able to fill open STEM jobs.  A University of Iowa survey in 2012 documented that 61% of Iowans agree that there aren’t enough skilled workers to fill STEM jobs in Iowa (slide 14 of the UNI Study). The Iowa Workforce development projects the need for STEM qualified workforce to grow from 57,830 in 2008 to 67,330 jobs by 2018, especially in the priority economic sectors of bio-science,  information technology, and advanced manufacturing.  These industries are prominently represented by employers large and small – names like DuPont/Pioneer, Monsanto, Rockwell Collins, Vermeer, Pella, and others in all corners of the state.

Our pipeline of homegrown talent, however, is leaking.  Our 8th graders, at the top in 1992 nationally, have fallen to 25th in Math and 13th in Science.  Only 51% of Iowa ACT test takers in 2010 were college math-ready, and only 11% of them were actually interested in a STEM major.   To top off the data, 93% of Iowa’s population growth comes from Latino/Asian/African-american populations who are half as likely to pursue a career in STEM fields than their white counterparts.

So couple the increasing need for workers in our STEM industries (from ~58000 to ~67000) with a decreasing population of potential homegrown STEM workers (STEM-interested high school graduates now at about 4000) , and we have a deficit.  Since it takes at least 22 years to take a newborn through college, and our STEM agenda is working hard to grow the number from K-16 within the 22 year constraint), our deficit will naturally grow over time until we fix our production problem.  The choice is to export the jobs or import the people.

Importing individuals may sound petty and trite, but economically it is a choice.  Without the oceans, mountains, temperate climate, and activities, we know that our government officials’ desire to import new Iowa citizens from the coasts will be minimally fruitful.  So, why not figure out a way to keep talented, STEM-ready, young people here?  BTW, this problem isn’t localized to Iowa – Brad Feld has shared his frustrations via his postsVivek Wadhwa through his book, the Immigrant Exodus, and numerous others, our industry titans are hurting for qualified individuals and unable to find them.

That’s what the STEM Jobs Act is designed to do.  The democrat representatives and President I voted for killed that movement to protect a silly diversity lottery.  A lottery that brings people with no eye for what they bring to the country.  More partisan politics that bears little benefit for the country’s citizens.  There is a chance I might get to discuss this with the President himself in a few weeks.  Hopefully I can deliver the message more concisely for political consumption by then.

Please hit your employees in DC to tell them we need the STEM Jobs act.  Here are the links -

Bruce – http://braley.house.gov/contact
Dave – https://loebsack.house.gov/contactform/default.aspx
Barack –  http://www.whitehouse.gov/contact/submit-questions-and-comments

–Tej

Steve Case: Want more jobs? Pass Startup Act 2.0 (or 3.0)

Steve Case makes the argument for carving an immigration path open for jobs creators by passing the Startup Act 2.0, which was developed by the Kauffman Foundation and refined and championed by Sen. Jerry Moran (R-KS), along with other DC Senate cosponsors

Here’s the risk of inaction to the US economy and job-seeking Americans:

When Poyan Rajamand completed his degree from Stanford University’s Graduate School of Business in 2008, he faced a choice. Would the Swedish-born Rajamand look for work in the United States or relocate abroad? As he explained in a report written by the Partnership for a New America Economy and the Partnership for New York City, Rajamand and his fiancé arrived at their decision easily: move to Singapore, where obtaining a visa was simpler for high-skilled immigrants than here in the United States. In his new home, Rajamand has founded a startup called Barghest Partners that invests in new businesses.

Imagine the lost job creation, innovation, and economic output if the same visa challenges that bedeviled Rajamand had bedeviled the immigrant founders of AT&T, Kraft Foods, Honeywell, US Steel, and DuPont? In more recent years, what would have happened to whole new industries had the immigrant founders of Google, Intel, and eBay set up shop abroad?

Read More

Immigration Issues in DC

Tej Dhawan of Startup City Des Moines and a cofounder of Startup Iowa passed along the following report from his recent visit to DC as part of the Greater Des Moines Partnership delegation:

There is an eerie consensus across the aisle in DC that our current immigration system is broken, in need of reform, and change is necessary for the long term economic growth.  There is little consensus on how such reform will be achieved, who will lead it, and what will eventually motivate Congress into action.

Human Capital, impacted by immigration, was one of the core topics of the Des Moines Partnership’s DC trip this spring and I am privileged in being able to join business and government leaders from our region on this trip.  I am certainly privileged to work with Lori Chesser from the Davis Brown Law firm and invited to a panel on immigration.

The panel, consisting of Rosemary Gutierrez and David Johns from Sen Harkin’s office, Kathy Neubel Kovarik from Sen Grassley’s office, Aaron Brickman from Department of Commerce, Ben Johnson from American Immigration Council, and moderated by Lori Chesser was attended by various members of the Des Moines community and focused significantly on answering questions from the audience and thus remaining very interactive.

There are three forms of legal immigration today – 1) marriage to a US citizen, 2) sponsorship by an employer, or 3) sponsorship by an American citizen family member.  Being involved in all three forms, I felt comfortable contributing my experience and need for policy changes and bills currently circulating in DC.  I am married to a natural born US citizen from Iowa,  have sponsored, on my previous company’s behalf, several H1b candidates from India, Nepal, Indonesia and Vietnam, many of who are taxpaying residents, green card holders, naturalized citizens and contributors to Iowa and the US economy.  I am also sponsoring my sister, a Malaysian citizen to the US.

What is broken and in need of fix are the second and third categories.  Whether it is the HR3012 bill that allows green cards to be issued from the available pool rather than be artificially limited, the proposed StartupVisa that allows for foreign entrepreneurs to start their businesses in the US when sponsored by an accredited US investor, the DREAM act  or others, several solutions exist and are available to Congress.

What I heard from many during this recent visit to DC was that many in Congress would rather wait for a comprehensive immigration reform.  Both Senators’ offices comments were consistent that they prefer comprehensive reform such that visas should not take jobs from US workers, college seats from native US students, be considered comprehensively and not piecemeal etc.

Though a desire for comprehensive reform is respectable, Congress hasn’t shown an ability to work together toward real reform in my voting life in the US.  Furthermore, careers in STEM fields continue to be underfilled by software developers, doctors and  engineers.  Companies large and small, represented in the audience for our forum, continue needing to offshore their work in absence of sufficient resources here.

As Jim Clifton so clearly pointed out in Coming Jobs War, there is a marked change underway worldwide.  Qualified technology workers are finding an ability to find careers overseas and no longer want to stand in line as second-class citizens in the US.  Recent news reports are listed net-immigration from Mexico even to be zero, resulting in shifts even in the agricultural economies of Texas, Florida and California.    People are finding opportunities elsewhere in the world, and if we are unable or unwilling to bring job-seekers here, our companies will be sending the jobs overseas.

My message to the congressional representatives and other members on the panel was clear –

  1. We can’t wait for comprehensive reform.  To stem the outflow of jobs, we must tweak our immigration policy through bills like the HR3012 that received significant support in the house (373-15) but remain stuck in the Senate.
  2. Small and new businesses are the job creators.  Startups, a subset of the new businesses, are the high growth leaders in wealth creation that leads to more job creators.  The StartupVisa, as introduced by Kerry and Luger in 2011 needs to be addressed in Congress.
  3. Our colleges and universities are global leaders in education and attract students from around the world.  As we graduate them and give them options to intern/train via OPT/CPT statutes, we should allow them the ability to apply for a green card and legal employment at the end of the practical training rather than subject them to 3-10 years of servitude via the H1b program.  These students represent a large community of individuals who are establishing strong ties to America – we need to grow through them.
  4. Our schools and colleges are not graduating needed numbers of STEM fields.  While we build that population up through K-12 systems over the next 20-30 years, we should make our universities and colleges attractive globally through a foreign student program as attractive as the one I used when entering this US in the 1980s.
  5. The DREAM Act proposes to give children of illegal immigrants a legal way to stay in the country.  Whether it is the original Dream act or the modified version by Senator Marco Rubio, the purpose is the same – keep and grow with those who love and cherish America.

We do not have time for comprehensive reform, or does Congress show any willingness to bridge the divide, specially in this election year and beyond.    If you have any doubts about our place in the world, pickup a copy of Jim Clifton’s Coming Jobs War or Thomas Friedman’s many tomes, including That Used to be Us.

Cross-posted: http://www.startupia.org/immigration-issues-revisited-in-dc/

Press Release – SEN. MORAN: AMERICA MUST WIN GLOBAL BATTLE FOR TALENT TO ENSURE FUTURE ECONOMIC GROWTH

A press release from one of the pro-Startup Visa Senators, who recently spoke on the Senate floor about the need for action on Startup Visa

Congress should pass Startup Act to create more opportunities for entrepreneurs

WASHINGTON, D.C. – U.S. Senator Jerry Moran (R-Kan.) spoke to his colleagues in the U.S. Senate today to urge their support for the Startup Act and to explain why our country’s future economic competitiveness depends on America winning the global battle for talent.

Sen. Moran introduced the Startup Act to jumpstart the economy through the creation and growth of new businesses. According to analysis conducted by the Ewing Marion Kauffman Foundation, companies less than 5 years old accounted for nearly all net job creation in the United States between 1980 and 2005. In fact, new firms create on average approximately 3 million jobs each year.

Research also shows that more than a quarter of the technology and engineering companies formed in the United States between 1995 and 2005 had at least one key founder who was foreign-born. To help America win the global battle for talent, the Startup Act creates an Entrepreneur’s Visa for foreign entrepreneurs who register a business and employ Americans in the United States. Sen. Moran’s proposal will also create a new STEM visa for foreign students who graduate from an accredited U.S. university with a Master’s or Ph.D. in science, technology, engineering, or mathematics.

By encouraging more entrepreneurs to stay in America, they will not only start more businesses, but they will employ more Americans and strengthen our economy. To learn more about the Startup Act, click here.

Excerpts from Sen. Moran’s remarks can be found below, along with links to video and audio downloads.

“The Department of Labor reported last week that more than 12 million Americans are still looking for work and our economy only added 115,000 jobs in April – the lowest number of jobs added in five months. This makes 39 straight months of an unemployment rate over 8 percent. Our first priority in Congress must be to strengthen our economy so more jobs can be created, more Americans can get back to work and more graduates can pursue their dreams.”

 “Rather than spend money on government programs, Congress should enact policies that create an environment in which entrepreneurs and their young companies have a better shot at success, and in the process of pursing success, put people to work.” 

 “The future of our country’s economic competitiveness depends on America winning the global battle for talent. The Department of Commerce projects STEM jobs to grow by 17 percent in the years ahead. We have to retain more of the highly-skilled and talented individuals we educate in America to remain competitive in the global economy. Doing so will fuel American economic growth and result in the creation of jobs for more Americans.”

 “Foreign-born Americans have a strong record of creating businesses and employing Americans. Rather than send these talented individuals who have been educated in America back home once they graduate, we should do more to allow them to remain in the United States where their skills and new ideas can fuel U.S. economic growth.”  

 “Despite the overwhelming evidence Congress should address this issue, conventional wisdom in Washington says that not much gets done during an election year. But if we wait much longer, we could lose even more highly-skilled talent to other countries who are working hard to attract and retain the best and brightest.”

 “Congress should work to make it easier for companies to grow, because in a free market, when people have a good idea and work hard, they not only enhance their own lives with their success – but the lives of so many others through their products and the jobs they create.”

 “If we don’t take steps now to win the global battle for talent, our country’s future economic growth will be limited. That means, college grads and young people will have fewer opportunities and high rates of unemployment may become the norm, instead of the exception. Allowing talented foreign-born students and entrepreneurs to remain in the U.S. will create jobs for more Americans.”

YOUTUBE:  Click here to watch the floor speech on YouTube.

 AUDIO:  Click here to download an audio clip of his full remarks.

E2 software startup primer for lawyers (and founders)

Cross-posted from with permission from Munly

I originally wrote this for a lawyer who’s a H1-B specialist and also understands the benefits that an E2 visa can offer but was not familiar with how startups or “lean startups” work. It’s essentially a quick primer/dummies guide with references and background. The E2 requirement is usually quoted as $100k which is usually more than what a seed or angel round usually raises but the E2 visa is another option while we wait endlessly for action on the startup visa (www.startupvisa.com). Feel free to send or cut and paste this if it’ll help brief your lawyer on such challenges, whichever visa you end up pursuing

As this is my non profit and not my personal blog (I don’t really have one), you probably followed this link from somewhere. As this doesn’t relate to the foundation, it’s not linked anywhere from our page. However free to link, cut and paste etc if you find it helpful.
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Basically there’s two phases to any software startup that’s building a product as opposed to selling services, being a body shop or working on govt contracts. Everyone follows a similar if not the same pattern

1) The initial phase aka pre-revenue or pre-funding which I’m in where a small technical team is essentially holed up in an apartment or room somewhere and working purely on the product. The only expenses are food, room and board keeping the burn rate as low as possible to increase the runway to create a “minimum viable product” as fast and as best possible. We are usually working off of some minimum “seed funding”, savings or credit cards or all of the above. Usually this amount is $100k or less, usually less which is why the E2 visa isn’t usually an option. When you say things can be done on $50k, then that is actually potentially in the realm of possibility for some seed or angel funded startups although most are working at the $20-30k level

Y Combinator is the leading and most high profile incubator in this area – http://ycombinator.com/ and they seed fund at $18k rounds.

2) Post funding, or with revenue and users. At this point the startup has gained some traction and potentially has some VC funding or has grown enough that an office is worth spending on. Even then there are a lot of problems despite them having created jobs and recieving funding already. They may have a few hundred k or a million in the bank and possibly a San Francisco office (not a worthwhile expense in my case).

http://techcrunch.com/2011/03/06/why-silicon-valley-immigrant-entreprene…

The key takeaway quote from the second video in the article is this. “Rapportive co-founder, Martin Kleppmann, who came to the U.S. from Germany, told Brokaw “In our case — we got a beautiful letter from the immigration service asking to prove that we had enough warehouse space to store our software inventory. We don’t even have boxes of software, it’s all on the Internet.”

As far as the E2 visa goes it’s the same two problems at the seed stage. The most significant expenses placed at risk are ALWAYS the money the founders pay themselves, and there will be no office or warehouse leases and likely not any business transactions other than costs of setting up and creating/registering a website etc. The risk portion comes from the product possibly being not deliverable at all, or there are many more unforeseen technical problems involved, hence the runway and risk of not enough funding. There are new and usually unique problems with almost any software endeavour, especially products and it carries with it a high risk of failure and blown out timelines and expenses. The entrepreneur is already taking a risk working on something new and unproven vs something established with market demand and existing customers. This is not standardised assembly line work. Immigration needs to understand these things. An office is usually the last thing on our minds as often we can accomplish what we need with a virtual workplace anyhow depending on the operation and size of business.

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Lastly here are some additional links that you don’t have to read but may give you a bit more background.

- One of the Instagram founders who was invited to the whitehouse still has similar problems despite his success. http://money.cnn.com/2012/01/25/technology/instagram_white_house/index.htm

Key takeaway quote. “”A lot of the regulations were created before we got into this age where folks can start companies cheaply and bootstrap and get things started,” he says. “Nowadays companies start with fewer people and less investments, so it’s a matter of finding out what regulations can be updated to match that reality.”

- Starting up in America. A 24 minute documentary with founders who are further along than I but many facing even worse problems. http://www.youtube.com/watch?v=5Nz4N2K64o8

- Lastly, the 4 minute cliffs notes version of visa problems for entrepreneurs, this is how I found you via the sidebar on youtube. EDIT, link fixed: http://www.youtube.com/watch?v=FLCYfhZEFb8

To execute on the idea of Startup Visa in DC, should the startup community support the DREAM Act?

In January 2012, President Obama said in his State of the Union:

But if election-year politics keeps Congress from acting on a comprehensive [immigration] plan, let’s at least agree to stop expelling responsible young people who want to staff our labs, start new businesses, defend this country.  Send me a law that gives them the chance to earn their citizenship.  I will sign it right away.

The translation of this is that the President supports a ‘minimum viable policy package’ containing STEM Green Cards (“staff our labs”), Startup Visa (“start new businesses”), and the DREAM Act (“defend this country”).

The impact of this proposal would be the following:

  • Graduate with an advanced technical degree from a US university: get a green card ‘stapled‘ to your diploma
  • Create startup jobs, build a great company: get a visa, fast track to a green card
  • Enlist in the military, serve honorably: get a visa, fast track to a green card, including undocumented immigrants

Should the startup community back this proposal? We’ve clearly supported STEM and Startup Visa in the past. The word from Washington is that those individual bills are too narrow to be viable—features, not products—the market of politicians won’t support them as is, thus the minimum viable policy package.

We, the community, need to decide if there is enough overlap with military service for us to support. The Bloomberg Administration of NYC and their Partnership for a New American Economy calls for chasing after the ‘best, brightest, and hardest working’ immigrants.

I think they and we should both support this package as a way to promote entrepreneurship and continue to make sure America remains the leader in innovation and monetization of great ideas and products.

White House ask: Tell us your startup story

The White House has an ask out to the startup community: how is your startup doing? What are some of the struggles you’ve faced and overcome?

For new founders in the past two years, tell the White House what being a new entrant to the startup world has been like. What networks have helped you? What have you most struggled with learning and adapting to?

For founders struggling with visa issues, why not take two minutes to share your story, explaining the need for Startup Visa?

“We would like to hear your story about how your business has done over these last 25 months. Please take a few minutes and share it here. These stories are critical to our policy work — so thank you.

As a reminder, yesterday, the White House signed the JOBS Act legislation that we supported and pushed through with over 5000 signatures on AngelList

“Yesterday, the President signed the Jumpstart Our Business Startups (JOBS) Act, a bipartisan bill that enacts many of the President’s proposals to encourage startups and support our nation’s small businesses. The JOBS Act will allow “crowdfunding” so startups and small businesses can raise up to $1 million annually from many small-dollar investors through web-based platforms, expand “mini public offerings”and create an “IPO on-ramp,” making it easier for young, high growth companies to go public. Read all about the JOBS Act here.”

Next up: Immigration, Startup Visa