Oh well? If payment in scrip lottery tickets isn't considered good enough for minimum wage laws, I don't see why this would be any different.

You actually bring up an interesting point. A startup lures employees with promise of huge payouts in its shares. But it cannot use those offered shares in an all cash competitive war to get H1B's based solely on cash.

There's a lot of things startups can't afford. And most startups are just fine with local talent.

You do auctions for 64k and 500 for startup founders. Then you set up an extra pool of 10k for startup employees. The company has to be younger than 6 years, raise at least 1 mln from venture capital and only 30% of the workforce could be on visas. It will make pseudo startups expensive to run by outsourcing companies.

Why should there be a requirement to raise venture capital? Some founders fund their own companies and are profitable from the start.

Because the outsourcing companies would set up a pseudo startup to abuse it. The solution is to make it expensive for them.