The Trump administration may soon formulate rules that, in effect, will serve as a deportation order for most international students who graduate from U.S. universities. Such an action not only, rather blindly, threatens America’s role as a center for innovation. It will also mean fewer entrepreneurs and the jobs they create for U.S. workers.
Numerous barriers exist that make it difficult for foreign nationals to remain in the United States after they found a company. Most importantly, there is no startup visa that grants permanent residence (a green card) to foreign-born entrepreneurs who start successful U.S. businesses. That’s why most foreign nationals wait until they obtain a green card before launching their venture.
International students may soon find themselves with no avenue even to work in the United States after graduation, let alone start a business. “Immigration and Customs Enforcement will issue a proposed rule that comprehensively reforms the Optional Practical Training (OPT) program for foreign students,” according to the law firm Berry Appleman & Leiden, commenting on the administration’s announced regulatory agenda. “The Trump administration has already indicated that it will limit the work opportunities available to foreign students and is likely to rescind Obama’s STEM-OPT Extension rule that expanded the extensions of OPT for foreign nationals holding U.S. degrees in STEM fields from 17 months to 24 months.”
Optional Practical Training allows international students to work for 12 months after graduation and, as noted, potentially another 24 months in a STEM (science, technology, engineering and math) field. Some international students have used their time on OPT to start a business and in cases that involve an American co-founder, the company can then petition for an H-1B temporary work visa for the international student (who would be an employee of the company).
The end of OPT (or the end of its usefulness) will foreclose another avenue for international students who want to start businesses in the United States. The difficulty such students already face can be seen in the story of Zoosk.
Zoosk co-founders Alex Mehr and Shayan Zadeh met in Iran as students back in the 1990s and dreamed of starting a company together in America. Alex and Shayan both attended the University of Maryland and entered an entrepreneurship workshop. Along with two other students, they developed a prototype for a new business software project, wrote a business plan and came in second place in the workshop contest.
The four students established a company. Then, they visited an immigration lawyer who gave them the bad news: The federal government was not likely to approve four H-1B petitions for foreign nationals who are all entrepreneurs running a company. The attorney advised them to disband the company, which they did.
Shayan Zadeh completed his master’s degree and landed a job with Microsoft. Alex Mehr stayed in school and tried to obtain an O-1 temporary visa, which is difficult to do. Instead, he gained lawful permanent residence after entering the Diversity Visa green card lottery.
Alex worked for an IT (information technology) consulting company and then landed a job with NASA.
Eventually, Alex and Shayan both went to San Francisco and worked on ideas for a new venture. Since both were now lawful permanent residents, U.S. immigration law would no longer thwart them in starting a business. The company that turned into Zoosk was in the beginning a Facebook application that allowed people to upload and vote on videos. That eventually transformed into an application that used the Facebook platform to become a dating site for singles.
Today, Zoosk, headquartered in San Francisco, California, has 33 million visible members and is available in more than 80 countries and in 25 languages. According to the company, “Zoosk is the #1 Online Dating and Social Networking App in the Apple App Store.”
A study last year from the National Foundation for American Policy concluded 21 of the 87 privately-held U.S. companies valued at $1 billion or more had a founder who first came to America as an international student. These “billion dollar startups” had at least one founder who was an immigrant in 44 of the 87 companies, meaning nearly half of the immigrant founders were at one time international students.
Elon Musk, born in South Africa, founded Tesla and SpaceX after gaining a degree in physics and a degree in economics from the Wharton School at the University of Pennsylvania. Renaud Visage, born in France, earned an M.S. in engineering and cofounded Eventbrite. Stanford graduate Amr Awadallah, born in Egypt, cofounded Cloudera, which is now a publicly traded company with a market capitalization of $2.5 billion headquartered in Palo Alto, California.
Will new Trump administration regulations, in effect, boot international students out of the country after they graduate from U.S. universities? Given the past year in immigration policy, it would be wise to place your money on this quite bad idea becoming official U.S. government policy. If so, America will lose many future entrepreneurs – and we will all be the poorer for it.
