Pandemic Impact Lingers For Immigrant Entrepreneurs

Startup founders from certain countries face stricter barriers to entering the United States because of the COVID-19 pandemic. But immigration experts say a series of developments, including a recent policy reversal by United States Citizenship and Immigration Services, has made it easier for immigrants already in the country to stay.

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The Biden administration’s pandemic-induced travel restrictions for certain countries has made it more difficult for entrepreneurs from those countries to qualify for national interest exceptions — a Trump-era requirement for a visa — that would allow them to come to the U.S., according to Sergei Pershman, founder of immigration law firm Pershman Law. And with consulates closed or operating with limited hours, it’s more difficult for those entrepreneurs to have their visas stamped.

“This could go away in a matter of weeks or could stay there for months,” Pershman said.

The national interest exception, which shows that a person qualifies for a visa and it’s in the national interest that they come to the U.S., was introduced under the Trump administration. It applies to employment-based visas such as the O-1 and H-1 visas. 

But the Biden administration has made it more difficult for entrepreneurs from certain countries to meet the qualifications because of the ongoing COVID-19 pandemic. Those countries include the United Kingdom, the Republic of Ireland, the European Schengen area, Brazil, South Africa, Iran and China. (It’s unclear if Biden’s most recent travel restrictions with India, announced on Friday, could affect those looking to emigrate from that country.)

It’s also still too early to tell how impactful the Biden administration’s policies will be on startup founders and those who are hoping to move to the U.S. to start a company, according to Pershman. 

“The expectations have certainly changed,” he said. “It’s kind of too early to say if there’s been a major change in how USCIS looks at certain kinds of petitions.”

Still, there have been some changes under Biden’s watch already that have implications for immigrant entrepreneurs.

Easier visa extensions

One notable recent change is a move by USCIS to return to its pre-Trump policy of granting visa extension petitions based on previous approvals. Before President Trump took office, the agency’s policy was that if a person was granted a visa such as an O-1 — a type of visa granted to an applicant with “extraordinary abilities” — an extension was typically granted unless there had been a major change in their situation. 

But in 2017, the Trump administration changed course and visa extensions were essentially viewed as new visa applications, meaning that a reviewer could decide that a person shouldn’t have received a visa in the first place and deny the extension.

“It meant there were considerable delays,” Pershman said. “Because it takes a much longer time to review like it was the first time. It was also very unreliable … you wouldn’t expect that the same case would be approved the next time you filed. So it raised a lot of uncertainty for a company.”

Last week, the policy change was reversed. 

More responsive immigration services

Another change is the level of responsiveness from USCIS in the past 100 days or so, according to Manan Mehta, founding partner of Unshackled Ventures, a San Francisco-based venture firm that invests in immigrant founders. A big issue with the Trump administration, Mehta said, was its rhetoric, which made the U.S. seem like an unwelcoming, difficult place to move to and start a company. 

And since the previous administration “gutted” the Department of Homeland Security, USCIS was understaffed, according to Mehta. The Biden administration, however, has increased staffing levels, which has in turn made the agency more responsive.

Better economic prospects

Now that the U.S. economy appears to be on the upswing as it recovers from the blow of the pandemic, more immigrants may want to come or stay and start a company, Mehta said. Already, with the vaccine rollout in the U.S. ramping up and COVID-19 cases on the decline, more international students are returning to schools, and now that they’re graduating, they’re more inclined to stay, he added. 

“I think there’s a lot of encouragement now and I’m seeing more and more founders and entrepreneurs returning back to school,” Mehta said.

The influx of entrepreneurship that Mehta has observed also tends to be younger founders, which is a good sign.

Despite the obvious negative aspects of the COVID-19 pandemic, it had a positive effect on tech entrepreneurship, according to Semyon Dukach, managing partner of Boston-based One Way Ventures, another venture firm that focuses on investing in immigrant startup founders. The firm’s results last year were boosted by COVID’s acceleration of tech, Dukach said. One Way Ventures has had at least three portfolio companies announce acquisitions since March 2020, per Crunchbase.

And while it’s barely been 100 days into the new administration, Dukach is optimistic for the future of founders who want to come to the United States and build companies.

“Certainly the rhetoric from the Biden administration makes it sound like it will be easier,” Dukach said.

No specific visa for startup founders

The most common visa for startup founders is the O-1 visa, which is granted to individuals who have demonstrated “extraordinary abilities.” To qualify for the visa, founders have to demonstrate that they have made significant achievements in their field, which they could try to establish by showing press coverage or other proof of accomplishment. 

The L-1 visa is commonly used by foreign companies that are already established elsewhere and want to expand into the United States, and the E-2 is used by investors from certain countries who want to temporarily run their business in the U.S. 

The H-1B visa is what’s most commonly talked about in the conversations around tech and immigration. An employment-based visa, the H-1B allows companies to hire people from other countries for “specialty occupations,” and there’s an annual cap for the number of visas that are issued. The visa is assigned through a lottery system.

However, it’s no longer very common for startups to use H-1B visas to bring talent over from other countries, according to Dukach, with the visa more often being used by large technology employers. 

According to Pershman that’s because it can be a lengthy process for someone to get a visa and emigrate to the United States, and while large tech companies are often continuously onboarding employees, that’s usually not the case for many startups. When a startup needs to hire, it usually wants to fill that position quickly and can’t wait six months, he said.

There is not — but should be, in Pershman’s view — a separate visa category for startup founders.

“A separate visa doesn’t exist right now where you could show this is a legitimate enterprise in the startup space, maybe has some funding already, has a clear business plan … it’s just not there,” he said.

Illustration: Dom Guzman