A solution for entrepreneurs struggling with the uncertainty and limitations of the U.S. visa system

“The Global Entrepreneur in Residence program seemed too good to be true, and we were skeptical at the beginning. But a couple of months after we engaged, we had the visa we needed. Now we are full of excitement about the prospects of our endeavor…”

MIT Media Lab grad Hasier Larrea – Founder, Ori Systems

Seeking a visa to move to or remain in Massachusetts and work for your newly created company? You might be transitioning from F-1 after graduating from a university; B-1 after participating in a startup accelerator; J-1 after completing an education exchange program; or you might be seeking to transfer your H-1B from another employer to your startup company.

Because there is no startup visa for entrepreneurs in the U.S. immigration system, entrepreneurs usually seek an H-1B visa. The H-1B is popular since it lasts for three years, but can be extended for another three years for a total of six years, more than enough time to establish a growing venture.

However, in seeking one of these magic tickets, entrepreneurs face multiple challenges. The entrepreneur’s startup company may not be sufficiently advanced in terms of financing and governance to even qualify to submit an H-1B petition. Plus, H-1B visas are capped at 85,000 per year, but two to three times as many apply for the visa, necessitating a lottery to determine the lucky 85,000 winners. The company has to wait for the next April 1st to file, hope it wins the H-1B lottery, and then wait until October 1st for the employee to start.

To smooth the path, Massachusetts established the Global Entrepreneur in Residence (GEIR) program. By working part-time at the University of Massachusetts, entrepreneurs can obtain a cap-exempt H-1B visa anytime during the year, since universities are exempt from the annual H-1B quota. The program gives an entrepreneur time to master the company building process, and document their talent and ability, so that they can eventually obtain a visa independent of the University of Massachusetts. GEIR graduates to date in Massachusetts have successfully filed capped H-1B petitions in the national lottery; O-1 (extraordinary ability) petitions; and EB-1 or 2 (green card) applications.

How rescuing Ori’s rockstar engineer illustrates the program’s benefits
Ori’s case demonstrates how the GEIR program works. While at the MIT Media Lab doing research, Haiser and Ori co-founders Ivan and Chad, engineers, came up with the idea of a robotic furniture company. A floor-to-ceiling unit would incorporate a bed and a closet on one side, and a home office and an entertainment suite on the other, transforming a tiny apartment into one that feels two to three times the size.

The team undertook preliminary activities necessary to start up Ori that are not considered “work” for which a visa is required under U.S. immigration law. As part of their educational program, the team developed the actuators, electronics and software that enable the heavy furniture units to glide and change shape, and then began meeting with and presenting their business idea to potential funders and customers.

Shortly after graduating from MIT, Haiser was able to secure seed investment ($750,000) from an angel investor. Seed investment triggered the formation of a board of directors with power to control the company. Although qualified to sponsor an H-1B visa, Haiser’s company faced another challenge. One of the co-founders, Ivan, needed an H-1B visa right away to keep the founding team intact after graduation. The startup company’s investor funding was received in November, but the H-1B lottery wasn’t until the following April and if his co-founder was selected, the visa would not be issued until October.

Ivan turned to the GEIR program, under which a university can step in any time during the year to facilitate an entrepreneur’s visa until the company can independently seek one. Haiser moved the company to the Venture Development Center. It was a win-win collaboration, as the university was actively seeking highly skilled mentors for a new engineering program. Haiser’s company filed an H-1B visa a petition and it was granted. The Venture Development Center had written a letter describing how the work performed by Ivan furthers the normal, primary, or essential work performed by the University of Massachusetts.

The visa kept the founding team intact and focused on developing the business. The following April, the company filed an H-1B petition in the lottery, and was notified in September that it had been granted. The company then “graduated” and moved from the Venture Development Center, with an H-1B visa independent of the University of Massachusetts. The company was at the Venture Development Center for about one year, during which it completed pilot projects and raised additional $6,000,000 Series A funding to manufacture and distribute more furniture units.

When the Global Entrepreneur in Residence program is right for you
The GEIR program is an ideal solution to the uncertainty and limitations of the visa system, when:

• The timelines of the national H-1B lottery don’t work for you.
• The uncertainty of the national H-1B lottery is intolerable.
• You missed out getting an H-1B in the lottery.
• You need a little more time to raise funding and establish a board so your startup company can qualify to apply for an H-1B, O-1 or EB-2 visa.

The latter case is typical. While on OPT approved by their university, an entrepreneur started building a minimum viable product, and continued to seek feedback from potential investors and customers. U.S. immigration rules are fairly simple–the majority of work (paid or unpaid) they will be doing during OPT must be related to their major field of study.

When the first year of OPT ends, however, the entrepreneur will no longer be able to work for their business unless it is qualified to employ them, and secures an H-1B visa. Qualified means it has raised at least $200,000 to demonstrate it can pay the entrepreneur at least part-time wages. And it has a board of directors which has the ability to control the employment of the entrepreneur. Many promising startups are not far enough along after OPT. In some cases, they need visa certainty to close the investment. So, entrepreneurs must seek an alternative means of work authorization. GEIR gives them more time to raise funding.

Why cap-exempt employment of entrepreneurs is authorized
The Massachusetts GEIR program carefully follows U.S. immigration law. Cap-exempt employment of highly skilled entrepreneurs “by” or “at” a university is authorized under the American Competitiveness in the Twenty-first Century Act (AC21), passed in October 2000. Among other things, AC21 exempts most U.S. institutions of higher education from the annual H-1B quota in order to relieve pressure on the H-1B quota and ensure these employers have reliable access to international specialists when filling professional positions. Subsequent memos issued by US Citizenship and Immigration Services (USCIS) provided guidance on cap-exempt H-1B employment. The Department of Homeland Security (DHS) included the guidance in regulations issued on November 18, 2016 that went into effect on January 17, 2017.

Under the DHS regulations, there are two ways skilled entrepreneurs and universities may collaborate:

1. “Employed by” a cap-exempt organization. USCIS regulations state that if an individual already is employed under a cap-exempt H-1B by a cap-exempt organization, then any other employer including the employee’s startup company may immediately petition for its own cap-exempt H-1B to be concurrent with the cap-exempt organization’s H-1B.

Thus, a university can sponsor an H-1B for the startup founder as a mentor for as little as 8 hours per week, then as soon as this cap-exempt H-1B is approved by USCIS and the founder is inside the U.S. in H-1B status, the founder’s company may piggy-back on top of this cap-exempt H-1B petition and file its own cap-exempt H-1B petition for the founder to immediately work full time for the company (concurrently with the part-time H-1B held by the cap-exempt organization). The law permits this even though otherwise the company would have had to wait for the next April 1st to file, hope it wins the H-1B lottery, and then wait until October 1st for the employee to start.

Employed “by” the university is best suited to an entrepreneur with a friends and family funded startup company that anticipates but has not as yet received seed funding for their company. They spend the rest of their time raising funds for their company so that it can sponsor their concurrent visa. The time gap between the two visas should be short, however, as the entrepreneur is not allowed to work for the startup without the second visa. Until getting that visa, the entrepreneur must limit their involvement in the startup to passive activities such as attending business meetings, and making presentations and negotiating with investors and customers in an effort to source funding for the startup.

2. “Employed at” a cap-exempt organization. USCIS recognizes that Congress chose to exempt from the numerical limitations of the H-1B cap certain foreign nationals who are employed “at” a cap-exempt organization, which is a broader category than foreign nationals employed “by” a cap-exempt organization.

Thus, USCIS allows all U.S. employers to directly file a cap-exempt H-1B petition if the foreign national worker is physically placed at a cap-exempt institution, and spends the majority of his or her work time performing job duties at a qualifying organization that directly and predominately further the essential purpose, mission, objectives or functions of the qualifying institution or organization, namely, higher education or nonprofit or governmental research. The U.S. employer directly filing a cap-exempt H-1B petition must be able to prove a logical nexus between the work performed predominately by the beneficiary and the normal, primary, or essential work performed by the qualifying institution.

Under the “employed by” and “employed at” pathways in the Massachusetts GEIR program, the entrepreneur must work in Boston at the Venture Development Center, the worksite listed in the H-1B, and in the job it was filed for. An entrepreneur cannot work in a different city or a different type of job, for example, if the company has a pilot in another city, the entrepreneur can travel to and from that city for meetings but can’t work there without a new H-1B petition.

What a Global Entrepreneur in Residence does
The Massachusetts law enabling GEIR at the University of Massachusetts states its objective as giving entrepreneurs “with the potential to create a high growth company” the opportunity to move to or remain in the Commonwealth to work on “assignments that further the university’s interests while developing skills required for organizing and establishing successful new business ventures.” These purposes are synergistic, because one of the best ways to develop skills is to practice them and then to teach others at the university how to do them. So, during the GEIR program, entrepreneurs focus on mastering the company building process, and sharing that knowledge and their expertise with university faculty, students and peers. The entrepreneurs give guest lectures in a class; train student interns; sponsor a capstone course project; or provide real-world challenges for problem-based courses. The entrepreneurs also come together every week at the VDC for a lively community lunch and learn and occasionally listen to eminences. They also schedule individual office hours as needed with the VDC staff, which are experienced in company building.

How universities benefit from Global Entrepreneurs in Residence on campus

The GEIR curriculum benefits the entrepreneur and the university. At the University of Massachusetts, the entrepreneurs are involved in ten problem-based courses in the Spring 2019 semester. In one, CS 410, the computer science capstone, professor Marc Pomplun enlisted four entrepreneurs in GEIR to participate. According to Marc: “The VDC entrepreneurs are a huge benefit to our students and to me – I don’t have to try hard to come up with project ideas that will most likely be inferior and less interesting and relevant to the students. And I don’t have to do as much supervision and can focus on other aspects of the course, mainly teaching.”

One of his students, Kristin Laird, agreed: “For many students, it’s their first experience to startup culture and solving real-world tech problems, and the insight and experience the entrepreneurs are lending is invaluable. Their guest lectures have been engaging and interesting, going beyond what we would normally have an opportunity to learn.”

GEIR Thrasyvoulos Karydis, founder of DeepCure, adds: “The students have been exceptional, contributing enough time from their schedule to get substantial work done for the projects — something that initially I had doubted would be the case. From the point of DeepCure, the engagement with the students has been very successful. The projects, while not part of our critical development roadmap, will be very useful to the company and will save us time and effort in developing our main product.”

At most universities, professors need to constantly network in order to find real-world projects and high quality sponsors for their problem-based courses. It is rare to find ones who have the time to guide student projects during the entire semester. By turning to the global entrepreneurs in residence, professors find real-world projects that motivate students by helping them make relevant connections between what they’re learning and their career goals.

A university welcomes entrepreneurs under the “employed by” and “employed at” cap-exemption if as in the case of the Venture Development Center, part of its mission and/or objectives is to create an entrepreneurial environment where students can combine critical thinking with practical experience. By partnering with immigrant entrepreneurs, universities can get access to these entrepreneurs’ experience in the startup world and highly skilled expertise to provide an educational resource for their students.

At the University of Massachusetts, the GEIR program is a public-private partnership. The cost of operating the program, including paying the attorney and filing fees associated with obtaining the H-1B visa, is shouldered by the university and partially underwritten by a state grant from the Mass Tech Collaborative. The cost of the entrepreneur’s part-time employment is also borne by the university and partially supported by sponsorships from third party entities such as investors, banks, law firms and employers, with demonstrable independent interest in the success of the participating entrepreneur and their company. Neither a participating entrepreneur, directly or indirectly, nor their relatives qualify as sponsors.

How Global Entrepreneurs in Residence graduate from the program
The GEIR program helps entrepreneurs carefully plan their long-term residency strategy. In Massachusetts, most entrepreneurs spend 9-18 months in GEIR before graduating. GEIR graduates to date have successfully filed an H-1B petition in the lottery; filed an O-1 petition; or filed an EB-1 or 2. GEIR gives an entrepreneur time to document their talent and ability. While they wait for the EB-1 or 2 green card, as an H-1B holder, in many cases, they can get unlimited extensions of their H-1B for as many years at it takes to complete their green card application.