Immigration Policy Holding Back the Most Dynamic Industry in the Country, Says Top Venture Capitalist
Date: August 1, 2016
Venky Ganesan, an Indian immigrant and prominent venture capitalist, believes that open borders have made America great. As a managing partner at Menlo Ventures, one of Silicon Valley’s oldest VC funds, Ganesan has seen just how important immigrants have been to the American economy. “Between one-third and one-half of the companies we fund have at least one immigrant founder,” he says. But restrictive visa policies create many unnecessary obstacles for these talented entrepreneurs. “Our immigration system is a real shame,” he says. “We make it hard for the best and brightest minds to come here. They’re taking their ideas to our competitors, to India and China.”
At 16, Ganesan was selected to spend his junior year at an American high school just south of Seattle. He would be the first in his family to travel to the United States from their small town in southern India. Determined to make the most of his student visa, he took enough classes to graduate a year early. His hard work paid off. “I got a full scholarship to do a 3-2 program at Cal Tech and Reed College,” he says. “I studied math and economics at Reed, and computer science at Cal Tech.” But his scholarship did not guarantee an effortless ride through college. Ganesan funded his own room and board by working as a program manager at Microsoft.
After graduation, Ganesan was eager to build a successful career and make his mark in America. But the immigration system erected barriers. Even though he had steady employment, he was forced to apply for multiple visas, simply to remain in the country. “I’ve had every visa offered by the U.S. immigration system,” he says.
After a stint at McKinsey, Ganesan and a fellow immigrant from Caltech started Trigo Technologies, a venture they eventually sold to IBM for $200 million in 2004.
But again, immigration policy threatened to stymie their progress. Immigrants who are in the United States on temporary visas for high skilled workers are not permitted to start their own companies, unless they invest a tremendous—often prohibitive—amount of money. The duo was lucky to drum up venture capital from respected VCs. Without this funding, however, Trigo Technologies would never have gotten off the ground. And the company turned out to be wildly successful. When they sold to IBM, “we made around 20 millionaires,” Ganesan says.
Immigration policy also created hiring obstacles for the company. “We had more than 150 employees, one-third of which were immigrants on visas for high-skilled workers,” Ganesan says. The reason: There weren’t enough American-born engineers who could do the work. But navigating the visa system was so difficult, that Ganesan and his partner were eventually forced to open an offshore site in India. “We tried our best to hire as many workers as we could here in the states,” he says. We had 20 employees in India.”
Our immigration system is a real shame… We make it hard for the best and brightest minds to come here. They’re taking their ideas to our competitors, to India and China.
Ganesan says that after IBM bought the business, the offshore site continued to expand—again because the process of hiring qualified immigrants in the states was so complicated. To him, that’s a horrible lost opportunity. If the immigration system wasn’t so broken, many more jobs could have been created on American soil, further fueling the economy, rather than abroad.
But there are ways to fix our broken system. “The United States’ ability to absorb and integrate people from all over the world drives its economy,” Ganesan insists. “Countries like Japan or Germany can’t do that.” In order to create a proactive, positive immigration system, Ganesan suggests offering green cards to graduate level students who study in STEM fields and create a startup visa for entrepreneurs with innovative ideas. “Job creation happens in small companies. We need to incentivize [immigrants from abroad] to start small businesses here in America,” he says.
