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Comment on USCIS Proposal for Entrepreneur Parole

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Submitted to USCIS on October 6, 2016.

I am Ann Cun, Business Immigration Attorney and founder of Accel Visa Attorneys, PC based in the Bay Area.  I have worked with numerous startup founders in helping them navigate alternatives to the H-1B, such as E-2s, O-1s, L-1s and EB-1A visas.  I have also volunteered actively with FWD.us with regards to shaping the dialogue on immigration reform and am a long time member of the American Immigration Lawyers Association.  My comments represent my own views as a practitioner.  They are based on years of anecdotal evidence, my impressions of the immigration bar’s collective experience with USCIS and the lack of meaningful immigration policies towards expanding foreign entrepreneurship in the U.S.

I applaud the efforts set forth in the Proposal by USCIS and offer the following five points for the Service’s consideration during this comment period:

1. Unintended Consequences: Disparate Impact on Women and Minority Founders. It is evident the Service considered multiple research studies on entrepreneurship, including those published by the Kaufmann Foundation. The Kaufmann Foundation 2012 study (See FN 66) categorizes high-growth entrepreneurship into three types: professional-user, end-user and hybrid model. In short, professional-user entrepreneurs receive external financing (private equity, VC and bank loans) at a higher percentage than end-user entrepreneurs. Professional-user Entrepreneurs also have higher rates of advanced degrees, and greater years of work experience, leading to a larger network from which to build. Professional-user Entrepreneurs are overwhelmingly white 87% and male 78.5%. The study shows that Professional-user Entrepreneurs report a higher percentage of revenue over time, greater revenues, higher numbers of full-time and part-time employees, as compared to their End-User Entrepreneur counterparts, who are comprised of a higher percentage of women and minorities, receive less external capital, and start their companies with personal funds at higher rate. Therefore, it is not surprising that with higher education, more experience, and a greater likelihood of receiving external funding, that the data resulting from Professional-user entrepreneurs results in higher revenue and hiring. If the Service were to extrapolate revenue and job creation as the deciding indicia for determining “potential for rapid growth”, the Service would be without fault to do so, as these two indicia appear neutral, on its face.

However, additional studies by the Kaufmann Foundation, American Immigration Council, Small Business Administration, and the Minority Business Development Agency point out that immigrant and native women and minorities face disproportionate obstacles when it comes to obtaining external financing of their enterprises, including obstacles such as bias and discrimination.  (See also my article.)

Although addressing the biases that exist at all levels of business financing (whether government or private equity/venture capital) is beyond the scope of this comment, the reality that immigrant women and minorities face when attempting to procure private capital financing is real. By prefacing eligibility solely on financing success procured from limited U.S. sources imposes unnecessary barriers for entry into this promising program. If the Service relaxed the financing threshold to also include additional (alternative) funding sources, so long as source of funds can be established (see my recommendations at #2 below), it would widen the eligibility pool.

2. Revised Alternative Third Criterion for Parole.  The Proposal indicates that if an applicant partially meets either the private or public financing threshold, he/she may provide alternative documentation to demonstrate “‘reliable and compelling’ evidence of the entity’s substantial potential for rapid growth and job creation”. The Service should seriously reconsider this alternative criteria and divest it entirely from the need to partially satisfy the other two criteria.  Instead, a revised third criterion could allow for reliable and compelling evidence of any of the following, or satisfaction of two or more of the following:

a) Other reliable alternative funding sources, either from abroad or from within the U.S., evidence of source of funding required

b) Participation in a leading accelerator or incubator abroad, as established by press or foreign government support or backing

c) Evidence of substantial revenues already earned, whether in the U.S. or abroad, that exceeds the Income-Related Conditions for Parole.

d) Scope of the business and whether it is in the national interest (e.g. public benefit corporations, focused in a STEM field, etc.)

e) Evidence of intent or engagement with U.S. entities for the duration of the initial parole period.d

3. Data Be Publicly Available.  Although the proposal is silent on the issue, to further shape policy and to ensure transparency, making available important data from the Parole for Entrepreneurs Program is critical. Data should include the number of applications submitted, rates of issuance of RFEs, rates of denials/approvals, processing times initially and after RFE response received, along with industry types, financing amounts received at the time of filing, along with applicant demographics, at annual intervals with the goal of gauging program outreach and efficacy.

4. Impact of Parole on Non-Immigrant Intent. The language of the proposal is unclear regarding the nature of the long-term impact the parole period would have on a foreign entrepreneur’s ability to obtain a non-immigrant visa abroad. Will the five years spent in the U.S. impinge on the foreign entrepreneurs’ ability to overcome non-immigrant intent with the Department of State when applying for non-immigrant visas that do not permit dual intent?

5. Delays in processing times. The proposal provides for no avenue to expedite an application.   Bear in mind that existing USCIS customers are experiencing lengthy delays on applications and petitions submitted to USCIS; wait times that exceed six months.  (Examples include Form I-539 Applications that have been pending for over six months with no ability to expedite via premium processing and H-1B petitions submitted in the most recent fiscal year’s lottery that are still pending despite commencement into this current fiscal year.)  What steps will USCIS take to ensure the Parole for Entrepreneur Program allocates proper resources to avoid exacerbating the backlog of existing applications/petitions?  Will USCIS dedicate one Service Center to process parole applications for entrepreneurs?  How many new staff members will the Service hire, if any, to accommodate the increase this new program?

Thank you for your consideration.

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