To be fair, this was not at all part of the original proposal; it's one of those idiotic riders tacked on by politicians after they get their hands on something. The only "approval" required was in the form of investors stumping up cash. Any accreditation should be of the investors, not the the founders.

This is pretty close to the E2 Treaty Investor visa, which exists already. I have held one of them. Our investment was bringing over a company founded in the UK. The interesting thing was that the majority of the actual investment came from US investors. Then our accountant valued the company, based on the work we had done since the investment, to be significantly higher than what the investment was. This was submitted in the paperwork, and was accepted.

So my one data point says: a good US immigration lawyer and an accountant who understands how to value software companies does do the trick.

The E2 Treaty Investor:

Nationals of qualifying Treaty countries who have made a significant investment in the United States may qualify for E2 Treaty Investor status. Like the E1 visa, there is no set minimum level of investment which may qualify for E2 status, but the lower the investment the less likely one is to qualify. Again, the level of investment must be sufficient to justify the treaty national (or his/her employees) presence in the United States. The investment must be in an operating business – i.e. simply buying property or stocks and bonds does not qualify. Also, a substantial part of the investment must have been made before applying for E2 status.

Source: http://www.workpermit.com/us/investor_e1_e2.htm

This is the problem area that bugs me about the founder visa concept. The concept is great. Embodying it into law requires it go through the sausage factory.

I jokingly told a doctor last week I could write health care reform in 5 pages. I'm pretty sure I could. But it wouldn't get through congress in that form.

I was being a bit glib. The sausage factory is there for a reason. That reason often sucks, but it's not random.

Look at it from a policy maker's standpoint: strip out the happy talk about money and jobs. What this boils down to is a group of rich people on the left coast asking for a grant of power, the power to give visas, with no oversight. The politicians doesn't know these geeks from anyone, and here they are asking for a slice of government power.

So they propose a committee to make sure this doesn't become a loophole for rich fugitives and tax-evasion. Certain types of people smell a cushy job and the role expands, the idea gets paraphrased to someone at WSJ and we end up with that sentence.

Well, there is potential for abuse: a startup founder gets an "investment" of $500k from an accredited angel and a permanent resident visa. A little while later, the startup takes an exit (e.g. dissolves the company and returns the assets to the investor), netting the founder a greencard in the process.

If you've got somebody willing to wire you $500k, you can basically do that already.

http://en.wikipedia.org/wiki/E-2_visa

Well, that requires that you leave the country immediately after the business has been concluded; this proposal says that "... the founder would be granted a permanent resident visa", which presumably wouldn't expire.

Another problem with the idea is that the investor approving your founder visa has additional leverage over you. This extra leverage will take the form of lower valuations, lower investments, and (even more) investor friendly terms.

For proof, look to H1Bs. H1B employees are paid significantly less than non-H1B employees. Don't like it? STFU or go back to your home country.

I think this may strongly depend on the home country (thus creating more distortion).

Home country is not necessarily Bangladesh, it could be UK or Switzerland, in which case the H1B holder can and does negotiate for market rate salary or he will go to his home country where he is payed fairly and life is just as good.

You're right, assuming the H1B employer is honest. However, the defacto primary use-case of an H1B is to depress the wages that MegaCorp pays its employees.

The current advocates of the Startup Visa probably have honest intentions, but I guarantee that after 10 years, the startup visa will work similarly to the H1B program.

The "visa discount" is a real phenomenon, but the alternative is not coming here at all. You don't have to like it (I don't), but that's how it goes.

> the alternative is not coming here at all

That is one alternative. Another is coming up with a program that doesn't allow MegaCorp to abuse its H1B employees and depress market wages for US citizens at the same time.

I completely agree.

There's an additional problem with this proposal - may great startups don't feel they need investment, which allows them to avoid VC's or hold out for favorable terms. From what I've read, this trend is increasing, and I'm pleased to see that founders with technical backgrounds are gaining power relative to investors with expensive watches and MBAs.

But with this proposal, investors would control more than money - they'd control the right to reside and work within the United States.

I don't enjoy being so cynical, but having witnessed the abuses of the H1B, I am absolutely certain that VCs would use this visa to gain power and push around the founders.

I agree 100%. Having the government decide what is a good idea or not for a startup is ridiculous.