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12:56 PM

Study: Many High Tech Start-ups Have Immigrant Founders

Around 31% of VC-funded firms had founders who came to the U.S. as "employment-sponsored immigrants" in programs like the H-1B vasa program.

Thousands of foreign engineers and high-tech specialists are hoping to enter the U.S. and dreaming of becoming successful entrepreneurs. A study released this week by the National Venture Capital Association indicates that many will likely see their dreams come true.

The NVCA surveyed a comprehensive swath of U.S. venture-backed companies whose stocks have been publicly traded and found that 40% of the high-tech firms had one or more immigrant founders.

Many of them came to the U.S. under the auspices of the H-1B program, which lets highly-skilled professionals work in the U.S. Emily Mendell, NVCA's VP of Strategic Affairs and Public Outreach, pointed out Friday that 31% of VC-funded firms had founders who came to the U.S. as "employment-sponsored immigrants" in programs like the H-1B program.

The H-1B program is currently under review by Congress and the NVCA and other tech organizations and companies favor raising the limit on H-1B visas and allowing more skilled immigrant workers to enter the country.

Most of the successful foreign-born entrepreneurs -- 46% -- came to the U.S. to study, usually as graduate students.

The study developed a long list of foreign immigrants who founded successful companies including Intel's Andy Grove, from Hungary; Sun Microsystem's Andreas Bechtolsheim, Germany, and Vinod Khosla, India; eBay's Pierre Omidyar, France; Yahoo's Jerry Yang, Taiwan; Google's Sergey Brin, Russia; Nvidia's Jen-Hsun Huang, Taiwan, and Cascade Communications' Gururaj Despande, India.

"The key lesson of the study is the importance of maintaining a more open, legal immigration system," said Stuart Anderson, co-author of the report, in a statement. "Few of these impressive immigrant entrepreneurs could have started a company immediately upon arriving in the U.S. -- many were just children, international students or H-1B professionals -- but it's clear that America helped shape them into entrepreneurs as much as they have helped shape America."

The immigrants came from different circumstances: Grove came as a refugee after the Hungarian Revolution, Bechtolsheim came as a student, and Yang came as a boy of 10 with his parents. Yang later studied at Stanford where he and another student started Yahoo. He was quoted by the NVCA as saying: "Yahoo would not be an American company today if the United States had not welcomed my family and me almost 30 years ago."

The NVCA released the report as Congress was studying proposals to increase the numbers of skilled workers under H-1B. One venture capitalist, Chad Waite, general partner at OVP Venture Partners in Seattle, made a pitch in favor of H-1B.

"The current quota on H-1B visas of 65,000 has not been sufficient to meet the demand for highly skilled professionals," he said in a statement. "In nine of the past 11 years, the quota was used up prior to the start of the fiscal year."

The study found that most emerging companies founded by immigrants -- 56% -- have California headquarters. Massachusetts and New York followed. The company most represented by immigrant founders was India, which accounted for 28% of the companies. Nearly 70% of the immigrant founders have become U.S. citizens.

The co-author of the report, Stuart Anderson, is executive director of the National Foundation for American Policy. The report was co-authored by Michaela Platzer, president of public policy research firm Content First.

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