Several tech entrepreneurs including Indian-origin brothers Atma and Anand Krishna have joined a lawsuit filed by the National Venture Capital Association against the U.S. Department of Homeland Security regarding the refusal to implement the International Entrepreneur Rule.
The rule, also referred to as the Startup Visa, would have made it easier for immigrant entrepreneurs, such as the Krishnas, who founded payments platform LotusPay, to start businesses in the U.S.
The rule was tabled from taking effect by President Donald Trump's administration earlier this year with hopes of dissolving it altogether by early 2018.
By putting the launching of the rule on hold, it is blocking would-be entrepreneurs from coming to and staying in the U.S.
That decision, according to NVCA's lawsuit, is harming the country’s economy and sending jobs overseas.
“Immigrant entrepreneurs play a vital role in strengthening the U.S. economy, creating new jobs for Americans and pushing the boundaries of innovation,” NVCA president and CEO Bobby Franklin said in a statement. “Rather than throw up roadblocks that prevent them from bringing their talent and ingenuity to our shores, we should welcome them with open arms.”
The Krishnas are launching their platform in India, and hope to expand it into the U.S. But without the option of a startup visa, Anand Krishna will soon have to leave the country, according to the lawsuit. His brother has already left.
The Trump administration in July suspended the Obama-era program less than a week before it was slated to go into effect, and said it will propose rescinding the rule altogether (see India-West article here).
If it had been allowed to roll out, the rule would have let immigrant founders stay in the U.S. for up to five years with a startup visa if they showed a plan for expanding their business locally.
Additionally, it would have given entrepreneurs who do not qualify for existing visa programs, such as the H-1B and L-1 programs routinely sought by Indian individuals seeking work in the U.S., a chance to stay in the U.S. and grow their businesses.
“It was disappointing to see the Trump administration stall implementation of the International Entrepreneur Rule," U.S. Rep. Ro Khanna, D-Calif., told India-West. The Indian American congressman represents California's 17th Congressional District that includes the heart of Silicon Valley, a hub for immigrant-led startups.
"Throughout Silicon Valley, immigrants have played a critical role in advancing our region for decades, in addition to being our family, friends, colleagues, and neighbors," Khanna added. "Just like I am fighting for my constituents every day in Congress, it is not uncommon for those impacted by Trump’s policies to take further action.”
A third of U.S. venture-backed companies that went public between 2006 and 2012 had at least one immigrant founder, according to a 2013 study by the NVCA, the Mercury News reported.
But the nation is losing its share of global venture capital investment because of its anti-immigrant stance, the NVCA claims, according to the report.
U.S. startups received more than 90 percent of global venture capital investment two decades ago. That number dropped to 81 percent a decade ago, and to 54 percent last year, according to the NVCA release cited in the report.
The association claims DHS violated the Administrative Procedure Act because it failed to solicit public comment before suspending the startup visa rule, it said.