H-1B ban will hurt startups and businesses: Experts


President Trump’s executive order to ban temporary work permit visas such as the H-1B will hurt tech companies already suffering due to pandemic, venture capitalists and immigration experts believe.

According to United States Citizenship and Immigration Services, since 1990 each year they release (issuance of visa) 65,000 H-1B visa to foreign national to work temporarily in the US, and 20,000 H-1B visas to international students who have earned advanced degrees from US universities.

“It’s not a positive move, but not shocking either,” Manan Mehta, Founding Partner at Unshackled Ventures, told indica.

Manan Mehta

Silicon Valley-based Unshackled Ventures started in 2015, helps immigrants establish startups and secure permanent residency visas, taking away the headache of H-1B and green card backlog.

“Since the launch of the fund, we have invested in 49 companies. Specifically, since 2017, we have invested in 30 unique companies. We will continue to support this population as it’s never been more important for there to be unity in support of American job creators,” Mehta said.

He shared an email that Unshackled sent its founders.

“We know that some of you may have questions about how this affects you specifically, so as always, our immigration team will be available to help you think through things like these. Since 2014, as the immigration landscape has shifted dramatically, we’ve continually stayed prepared and agile for days like this. Like so many of you, we have adapted and focused on showcasing the value our customers need. So with that, we remain steadfast & proactive in our support of you. Stay strong, stay safe, stay hungry, and keep creating American jobs. We are in this with you all,” the email said.

Asked about the executive order’s impact on startups, Mehta said that it would vary from company to company but, ultimately, it’s about investing in the untapped, unlimited potential of natural entrepreneurs.

“Unshackled gets to be the friends and family round that immigrants don’t often have and marries that to the opportunities to meet incredible influencers afforded by this country to achieve great innovation across industries like health care, food distribution, manufacturing. These are industries that are critical to America’s competitiveness and capitalism, “ said Mehta.

Sean Randolph,

Sean Randolph, senior director (left in photograph on top), Bay Area Council Economic Institute, Bay Area Science and Innovation Consortium, told indica that Trump’s executive order would suppress entrepreneurship, “since we know that immigrants are far more likely than native-born people to start companies”.

He said that more than half of current unicorns have at least one immigrant founder, and on average each such startup employs 1,200 people.

Of the unicorns founded by immigrants, 33 per cent are in California and most of those are in the Bay Area.

More than 70 percent of unicorns have an immigrant in a senior management position such as CEO, CTO, or VP for engineering, Randolph pointed out.

“So from the standpoint of employment the writing is on the wall: fewer immigrants, fewer startups, fewer jobs. And nothing in the administration’s order does anything to create jobs,” Randolph said.

He said there also may be a knock-on effect at universities, which depend heavily on overseas students to fill their engineering and computer science departments.

“The risk is that fewer students may apply if they believe they won’t have the opportunity to work afterward in the US,” he said.

If technology and other companies can’t find the skills they need here they’re more likely to shift jobs out of the US, Randolph pointed out.

So the gains from he order appear to be short term and marginal but the long-term effects could be significant, particularly if the policy is extended beyond this year, he said.

A highly placed source in a small technology firm in the Bay Area said the company sponsored three H-1B visas and all got into the lottery. But due to COVID-19 the American consulates are closed in India, so they cannot go for visa stamping and cannot come to the US.

Jay Terkiana

Asked what the company would do, the source said: “It’s ok as long as they can work from India. The job and the projects need to be done, whether from India, China or Vietnam, how does it matter?”

Jay Terkiana, an immigration attorney in California, felt the ban would harm individuals, families and employers.

“This is not going to help in economic recovery as the Trump administration is proclaiming,” Terkiana told indica.

“This will hurt businesses nationwide, specifically in Silicon Valley, who rely on the H-1B workforce. It could also cause a ripple effect, and in turn also affect the associated industries in the Bay Area, such as housing, hospitality, food and restaurants which are already suffering because of COVID-19 lockdowns in effect. The Trump administration is simply trying to limit legal immigration,” he added.

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