Good MIT Tech Review post on VCs focused on immigrant founders. I know the CEO of one of the VCs mentioned and can attest not just to a solid vision but also a clear business focus. Some key points:
These are tense times for foreigners who want to live and work in the U.S., due to President Trump’s aggressive remarks and stringent policies about immigration. But skilled immigrants who want to start companies in the U.S. are finding support in a group of venture capitalist investors who aim to ease their challenges.
Such assistance can be crucial to immigrant entrepreneurs because the U.S.—unlike Canada, France, Singapore, and the U.K.—lacks a so-called startup visa. In July, the Trump administration delayed the International Entrepreneur Rule, an Obama-era regulation that would have helped international founders stay in the U.S. for up to five years and has indicated it plans to rescind it. In its absence, several VC firms that explicitly invest in companies created by immigrants are filling some of the gaps.
Though these firms, which include Unshackled Ventures, One Way Ventures, and One VC, were not created in direct response to Trump’s actions, their focus on aiding immigrants is particularly timely and vital now. “As immigration issues pop up, we’re seeing VCs answer the call and offer immigration counsel [to their portfolio companies],” says Jeff Farrah, vice president of government affairs at the National Venture Capital Association, a Washington, D.C., trade group.
Some of these investors think focusing on immigrants gives them a greater sense of mission and deeper connection to their work. They also tend to believe that immigrants make better entrepreneurs. The VCs attribute this to the personal qualities that compel people to emigrate, as well as those they develop while navigating a new country. “We think there’s an overall thread between immigrant founders that’s amazing, whether it’s because of their work ethic, determination, grit, or hunger,” says One Way Ventures founding partner Eveline Buchatskiy.
Naturally, these VCs also have financial incentives. They view immigrant entrepreneurs as smart investments, in part because other VCs consider them risky, leaving them underfunded and undervalued compared to their peers. One Way and Unshackled Ventures also point to statistics that indicate how successful these startups can be, such as a 2016 study by the National Foundation for American Policy that found that immigrants founded or cofounded half of the U.S.-based “unicorn” startups that were then valued at $1 billion or more, including Instacart, Slack, SpaceX, and Uber.
Unshackled Ventures’s portfolio also shows encouraging results, with more than half of the 17 companies it has backed already generating revenue. The firm says its invested capital has doubled in value over the past three years, reaping an internal rate of return twice as high as the national average for similar-aged funds.