by William Brah
You can start a company on a visa as long as the visa permits you to engage in business. In general, a student visa isn’t one of these. The challenge is the amount of time it takes to get a work visa after you graduate even if you are qualified. While you wait, you might have to leave the country while your startup team members stay.
But not if you launch in Boston, which stepped in with a solution called Global Entrepreneur in Residence (GEIR), the first and best program of its kind in the nation. It gives you more time in the country to develop the company, raise funds and get a work visa.
Since 2015, GEIR has helped 61 entrepreneurs from many different universities get 105 H-1B and O-1 work visas as well as “extraordinary ability” and “national interest waiver” – based green cards (also known as EB-1 and EB-2), to launch their companies. 35% are from MIT and Harvard. Every founder has succeeded in getting a visa. Their companies have 856 employees, and have raised $498,208,000 in venture capital.
Best practices for starting a company on a visa
Based on this experience here are best practices for starting a company on a visa including how to leverage GEIR.
I’ll be referencing several types of work statuses. The F-1 OPT is a 1-year long work authorization for post graduation optional practical training. A U.S. STEM degree can give you 24 more months. The H-1B is for 3 years, but can be extended for another 3 years. The O-1 is for 3 years, but can be extended indefinitely one year at a time. The EB-1 and 2 processes result in permanent residence (green card status) which lasts indefinitely. Green cards are issued initially for 10 years at a time. Usually, entrepreneurs get these work visas in this order.
On a F-1 student visa, you are not permitted to operate your own business, work for the business even as a volunteer, or receive compensation or salary including deferred. But you can do preliminary planning for the business. So use your time productively.
Try to complete customer discovery ending with a minimum viable product. On a F-1 you can engage in discussions or conduct research such as performing customer discovery, engaging in competitive analysis, exploring potential company formation options and equity arrangements with co-founders, building a test model to explore the technical feasibility of a product, drafting potential marketing materials, etc.
Being able to demonstrate problem/solution fit is the minimum gating criteria for fund raising. The question then becomes if you can execute on a solution to this problem and get customers to pay you.
Then you graduate, change your status to OPT, and start customer validation. You can establish the company, work for it for one year, do pilot projects and raise a seed round. Customer validation is the ideal time to raise funds. Without some validation you don’t have product/market credibility which typically comes at a price – reflected in lower valuations and investor-favored term sheets.
For STEM 24 month OPT extensions you can’t be your own employer. So you really have 1 year to get your company going so it can employ you and qualify to obtain an H-1B, O-1 or EB-1 or 2 work status.
That’s the challenge. It takes time to advance the company and demonstrate qualifications for a work visa, usually more than your one year OPT period will allow. And even if you can, there are more immigration hurdles.
For example, there aren’t enough H-1Bs for all who apply. You have to hope you win one in a lottery. Those with master’s degrees have higher chance than bachelors but less than 50%. You apply in April but won’t know if you are selected until September. Or, worse, you may be from a country with a long waiting list for limited EB-1 employment based visas.
These sorts of hurdles are why many students feel they may have to return home when they graduate to pursue their entrepreneurial dreams. But you don’t have to, at least in Boston. Most of the 100+ investors in Boston who say they do seed stage are accustomed to teams with one or more foreign nationals. Your visa risk is not on top of their list, but it is on it. Investors will expect you to have plan to get a visa that permits you to engage in business.
The go-to plan in Boston has become GEIR, whereby the University of Massachusetts sponsors an H-1B visa, then hires you part-time for up to 3 years to continue to advance your startup, and obtain your own H-1B, O-1 or EB-1 or 2. Universities are exempt from H-1B quotas, so they can petition any time during the year. You can then bootstrap onto this exemption by having your company sponsor you for another concurrent H-1B visa, so you effectively work both for UMass (part-time) and for your own company.
GEIR gives you more time to establish the company and complete documentation for a work visa. Normally, we accept teams with pre-seed rounds, which achieve a seed round and then successfully follow-on H-1B, O-1 or EB-1 or 2 visas within 2 years of joining GEIR. Then they “graduate” with a visa independent of the University of Massachusetts and usually grab a Series A.
In return for the visa, the University of Massachusetts expects you to share what you learn about the company building process with others. You do that by training an intern, giving a lecture in a class, mentoring a capstone project, activities you probably already would be doing anyway.
Boston has learned how to successfully help entrepreneurs navigate the immigration system. The key though is for you to start planning early. It will take you longer than you think and cost you more than you want to get the right work visa if you wait to the last minute.
Start planning now
Start planning now by looking at getting an EB-1 or 2 even if you might someday return to your home country. It’s the rock star green card solution for an entrepreneur. Review the criteria and plan strategically with a good immigration lawyer. Successful candidates hold considerable proof that they are at the top of their field. If you fall a bit short, try looking at the O-1 visa instead. It requires less intensive documentation. Plan your F-1, OPT and H-1B activities accordingly to meet as many criteria as you can.
You can do this. Use your legendary grit to grab that seed round and a visa. Boston will be by your side every step of the way.
For more information on GEIR program, please check out VDC’s detailed blog post on How Does the Massachusetts Global Entrepreneur in Residence Program Work and visit http://vdc.umb.edu/entrepreneur-visa-sponsorship/.