Immigrants Fill Top Ranks of Venture-Backed Tech Startups
Immigrant entrepreneurs are playing important roles at U.S. technology startups, with immigrants serving in key management and product development positions at 37 of the top 50 venture-backed companies—or roughly three out of every four of the startups—according to a study released yesterday.
“It’s clear that America gains a great deal when we’re open to talent, wherever that talent was born,” said Stuart Anderson, executive director of the Virginia-based National Foundation for American Policy and author of the study.
The foundation, a non-profit and non-partisan research outfit, says Anderson’s study is the first to examine the role played by immigrants in starting companies that develop new technologies, products, and services in information technology, health, energy, business and financial services, and other fields.
Mark Heesen, president of the National Venture Capital Association, said the venture-backed companies in the study with immigrant founders created 150 jobs on average—and “job creation is so critical in this day and age.” During a media conference call, Heesen also lamented “the amount of time and capital that entrepreneurs and VCs spend on trying to help these entrepreneurs get green cards so they can stay here in the United States.”
Of course, the study comes at a time when Congress is considering various legislation that would make it easier for talented and highly educated foreign nationals to gain permanent U.S. residency. While roughly 140,000 immigrants win green cards that enable them to remain in the United States each year, Anderson said U.S. immigration policy should be relaxed to allow foreign-born students to remain permanently in the United States after obtaining a master’s or doctoral degree.
Without reform, Iranian-born Alex Mehr warned that foreign-born students graduating from American universities with advanced degrees will “choose to go to Canada or some European countries [to start new companies], basically because of U.S. immigration policy.” Mehr and longtime friend Shayan Zadeh, who met as students at the Sharif University of Technology in Tehran, also studied at U.S. universities and later co-founded San Francisco-based Zoosk, a romantic social networking site.
“We are finally getting on track in Congress in making the distinction between legal immigration and illegal immigration,” Heesen said.
Anderson based his research, which was funded by a grant from the Ewing Marion Kauffman Foundation, on the top 50 venture-funded companies, as ranked earlier this year by the research firm VentureSource. Each company in the sample has raised capital from venture investors in the past three years, is privately held, and is valued at less than $1 billion. VentureSource based its ranking on the companies’ growth, the founders and investors, capital raised, and the CEOs’ previous success.
Some highlights from Anderson’s report:
—Twenty-three companies, or almost half of the 50-company sample, had at least one founder who was an immigrant.
—The most common country of origin for an immigrant founder was India, followed by Israel, Canada, Iran and New Zealand. Other immigrants who founded or co-founded companies in the sample were born in Italy, South Africa, Greece, Norway, Germany, the United Kingdom, Singapore, Switzerland and France.
—The most common job held by an immigrant at a venture-backed U.S. startup was chief technology officer.
The full report can be downloaded here.