Phil Buckendorf, a blonde, slight 23-year-old from Germany, is one of the house's entrepreneurial hopefuls. He's currently here on a business-visitor visa that allows him a six-month stay, he explained on a recent afternoon while sitting in the living room of the one-story Waverley Street home.
The bungalow is owned by Blackbox, a local company that hosts non-U.S. startup founders for an intensive two-week crash course in all-things-Silicon Valley and then selects a few to accelerate.
Because the startup members, like Buckendorf, come to Palo Alto on short-term business-visitor visas, they must find their own way to stay for the long haul.
Buckendorf and many other foreign entrepreneurs say living with the limited status and sometimes nonsensical requirements imposed by immigration law doesn't necessarily hold them back, but rather takes up precious time, energy and money they'd rather be spending on innovating and creating their companies.
Under his current immigration status, Buckendorf can legally raise funds, acquire customers and talk to merchants.
"But the moment I sit at the computer and I do one line of design in Photoshop, it's considered work, and it wouldn't be 100 percent legal," he said.
He does not pay himself a salary.
Buckendorf is in the process of applying for an E-2 visa, which is granted to immigrants from countries the U.S. has treaties with and would give him two more years in the valley.
Julia Krysztofiak, a Polish business developer with a trace of an accent, came to Palo Alto three years ago when her husband got a job offer he couldn't refuse from Google. She originally joined the Blackbox team to help develop some of its programs.
"After meeting so many foreign entrepreneurs, I got inspired," she said. "I said, 'Well, actually, I would rather be on the other side and have my own company.'"
So she launched her own niche startup, selling custom- and rare-sized bras from Poland, which she said is disrupting the industry in its own way, much like other more conventional valley startups.
The only problem for Krysztofiak, a coder who spent her entire career in Poland working at startups, is that she's here on an H-4 visa. That allows her to stay in the United States but not to work here. H-4s are issued to the spouse and young children of holders of H-1B visas.
"It was kind of hard for me when I moved here," she said. "It's hard for the H-1B wives. They have to quit their career back home."
Though they can't work, H-4 visa holders can own companies, so Krysztofiak's startup is legal — she just can't be named CEO (her sister holds the title).
Buckendorf's and Krysztofiak's situations are not unusual; in fact, dealing with the limitations imposed by U.S. immigration law has become an inherent part of the valley experience for a vast majority of the tech industry, from immigrants hoping to start their own companies to the tech companies, large and small, who want to hire them.
The challenges have become so pressing that many of the industry's most visible, powerful leaders — Facebook's Mark Zuckerberg, Microsoft's Bill Gates, Google's Sergey Brin — are clamoring for Washington, D.C., to implement comprehensive immigration reform. They're spending millions of dollars lobbying Congress to issue more visas to meet the demand for specialty jobs such as engineering and computer programming and to adopt a proposed visa category that's geared specifically to immigrant entrepreneurs who have raised capital from American investors.
In-house immigration legal teams have also become the norm at larger tech companies in Silicon Valley, with an increasing amount of money and time spent on processing visa applications each year.
With those in the industry charging that the federal government's immigration system has failed to keep up with the realities of Silicon Valley's enormous economic potential and international allure, they paint a picture of a clash of worlds that increasingly demands, but is not yet receiving, reform.
The golden ticket: the H-1B visa
The most common path for immigrant tech workers — and the most nationally debated visa — is the H-1B, a temporary visa that allows employment of foreigners in specialty occupations like engineering or computer programming. Its purpose, in theory, is to bring highly skilled foreigners to America to work in fields where hires are in short supply, such as information technology (IT).
Every April, the government grants 85,000 H-1B visas, allowing recipients six years in the United States — a much longer stay than most temporary worker visas. The 85,000 cap, which is a controversial limit for those in the valley, includes 65,000 for international workers in professional or specialty occupations and an additional 20,000 for those with master's degrees from U.S. institutions.
The visas are issued through a random, computer-generated lottery until the cap is met. This year, it took less than a week, with about 172,500 applications received, according to U.S. Citizenship and Immigration Services (USCIS).
For many Silicon Valley hopefuls, the H-1B is the golden ticket to securing a permanent life in the United States. But this visa's process and requirements are complex, making it an unattractive option for those who want to create their own companies.
An Israeli woman, Alex, who requested anonymity in this article due to her in-flux immigration status, came to the United States in 2012 with an H-1B sponsored by her employer, a large international corporation. She, like many other foreign entrepreneurs, hoped that once in Silicon Valley, she could find the means to leave the company to pursue her own tech ventures.
With her significant other, Alex found and rented an apartment in Palo Alto. She soon decided that she was ready to take the plunge and start her own company, but without an employer to back her H1-B (a requirement specific to this visa), she would lose her immigration status. As a placeholder, she got a job at a local startup, but she said things fell apart after conflict arose, unrelated to her, between the founders.
"I was without a job. That's a very stressful situation," she said. "The fact is, the moment you're out of a job, you're out of status. So you need to leave the country right away."
Instead of looking for a new job, she had to go to Mexico and return as a tourist. She hired an immigration attorney to help explain what her options to stay in the country might be.
"All of those things have costs," she said. "It's not just 'leave and come back'; it's all these considerations. I got an apartment; my lease is for a year. What should I do? Should I give notice? I don't know if I'm going to be able to come back; I don't know if I'll get a new employer. It really leaves me in the air."
Karlygash Burkitbayeva, a Stanford Business School graduate from Kazakhstan, co-founded a sunglasses company with another alumnus in 2011. Though she had a year of breathing room granted by an Optional Training Visa, a year-long extension for foreign students who want to work in the same field that they studied, she was well-aware of the consequences looming when that year ended. She applied for an H-1B very early — at the same time her company was founded and got its initial investment.
"There was a point at which it was either going to be yes or no from USCIS, and if it were no, I would have had to leave the country within 15 days," she said.
With her own company sponsoring her application, the process became more complex. The government requires H-1B sponsors to prove they can pay the prevailing wage, or the wage that's paid to similar positions in the geographic area, when hiring a foreign worker, so as to not "adversely affect the wages and working conditions of U.S. workers comparably employed," according to the U.S. Department of Labor.
"We had to declare myself as a supply team manager, which I still am apparently, because I had to qualify for the prevailing wage," Burkitbayeva said at an immigration-entrepreneurs event in March.
For a fledgling startup, raising enough money to pay its own founder or new hires the prevailing wage can be challenging and also forces still-maturing companies to raise money earlier than usual, some founders said.
Another problematic requirement is that all H-1B recipients are qualified for not the current, but the next fiscal year, meaning they have to wait until Oct. 1 to legally start working. This makes things difficult not only for the recipients but also the companies who want to hire them. Some small startups who cannot afford the price or length of time the H-1B takes resort to hiring solely from countries with easier visa processes. (Canada is a popular choice; under the North American Free Trade Agreement, Canadian citizens can easily obtain a visa that allows them to work for up to three years full- or part-time for a U.S. company.)
The cap on the number of H-1B's issued each year is also hotly debated in the tech arena, with tech powerhouses lampooning the use of a random lottery to hire highly skilled people and continually lobbying the government to raise the cap.
Though the number of applications does ebb and flow with the economy, the cap has been met every year since 2004. In 2008 (for fiscal year 2009), it was reached within one week, with 246,647 applications filed, according to USCIS data.
"It's all around kind of frustrating," said immigration lawyer Helga Carson of Palo Alto-based Rose Carson Kaplan Choi & White. "There's talk about helping entrepreneurs come in, but (the government) really hasn't changed the visa processes, and they really haven't made it that much easier. They're sort of speaking out of their tongue and really not paving the way for these people to come in — and these are the people that are generating all kinds of activity in our economy."
Carson added that the application process has become more laborious for immigration attorneys, with more documentation required today than in the past.
"The problem is two-fold: (1) The laws have not kept up with today's business realities, thus forcing attorneys to try to apply old visa categories to new business realities, and (2) The DHS (Department of Homeland Security) is taking an ever more restrictive reading of the laws (that I don't think follows true Congressional intent), and not providing clear direction with regard to its interpretations," Carson wrote in an email. "The latter results in attorneys having to guess what DHS wants, and to over-document cases."
Carson said her firm used to file H-1B cases that weighed about half a pound in paper; now, the average weight for an H-1B filing is about 4 to 6 pounds, she said.
She attributes the government's increasingly restrictive enforcement of immigration law mainly to 9/11.
"That's been compounded by the recession we had in 2008," she added. "It really became all about jobs and the drum beat of, 'Let's keep jobs for U.S. workers' and 'Every foreign national is taking a job from a U.S. worker,' which is absolutely not the case — which we know in Silicon Valley, but there a lot of places in the country that don't have the same industry and infrastructure that we do here."
An alphabet soup of visas
The struggle of doing business here as a non-U.S. citizen is defined by various visa codes that have become common jargon for immigrants in the valley.
Many start as international students on the easy-to-obtain F (for attending a private elementary school, high school, college or university) or J-1 (research) visas. F visas last as long as the recipient is connected to a U.S. academic institution in some way; J-1's have an expiration date of three years.
Tony Lai, an Oxford University graduate from England, came to Palo Alto on an F visa in 2010 to get a master's in law, science and technology at the Stanford Graduate School of Business.
After graduating, he took advantage of the OPT visa, which offers an in-between resting point between the ease of student visas and the thorny reality of opting for longer-term immigration status.
During Lai's OPT year, he worked at StartX, a nonprofit tech accelerator that supports Stanford entrepreneurs starting their own companies. This time gave him the necessary breathing room to develop his own company, LawGives, an online platform that aims to streamline the legal process for foreign entrepreneurs, connecting them with local immigration lawyers for free and providing support along the way. (See sidebar on page 25.)
Luckily for Lai, Stanford considered LawGives research, allowing him to transition to a J-1 visa and have three more years in the country.
"To tell you the truth, having Stanford's go ahead — it's a huge weight off our shoulders," Lai said of himself and his co-founder, a technology lawyer from Belgium who also studied law at Stanford. "We've built a team here; we've built a home here with friends and communities; and what we're building here, we plan to roll out here. We want to have a big impact on the legal system here in the states before we go out and spread this around the world.
"Having the weight of the worry and stress around getting deported or not having an easy way to stay here — that stress surreptitiously weighs on you in a sense."
As Lai's J-1 visa expiration date approaches next year, he's planning to go for an O-1 visa, one of the more difficult and expensive visa options.
"Colloquially known as the 'rockstar' visa," Lai said, the O-1 is for foreigners who are able to demonstrate outstanding ability and accomplishment in science, arts, education, business or athletics. It's a notoriously complex visa that requires mountains of paperwork but is ideal for the entrepreneurial freedom it provides, Lai said.
Unlike the H1-B, the O-1 visa does not tie the applicant to any employer or sponsor, and it does not include requirements like paying the recipient the prevailing wage.
"Frankly, we would rather not pay ourselves anything close to the prevailing wage as we build this," Lai said. "Every dollar counts. If you can use that dollar towards building the company rather than paying yourself, that's always going to be better."
O-1 applicants must prove themselves as "extraordinary" to the government through publications, research, letters of recommendation, press coverage, conference attendances or presentations and the like. (Another option is if applicants have won a major, internationally recognized award, such as a Nobel Prize.) The visa lasts for three years, but provisions allow for extensions, as long as the holder can continue to prove that he or she is still outstanding in his or her field.
"(The O-1) is pretty difficult to use for a lot of the young people who are out there starting companies because they don't have long track records, and I'm sure a lot of them are extraordinary, but the government is looking for documents like awards and presentations and those kind of things," immigration lawyer Carson said. "It doesn't necessarily work that well for people coming out of school and starting companies."
A Stanford University post-doctorate graduate from Germany who, facing the end of his J-1 research visa, recently applied for an O-1, came to an interview on a recent afternoon with his O-1 documentation in tow — a stack of papers about a foot high. He requested to remain anonymous in this article as he's still in the midst of the immigration process.
"I mean you can start a company (on a J-1), but you're not able to work for the company, right? So you can do all the side work, which is fine, but ... this is a problem because we're raising money right now, so people ask, 'What's your status?' And if you say, 'Oh, I have no idea,' they will back up because they don't want to have that. It really limits you from starting a business, even (from) finding work here."
After spending five months and close to $8,000, getting rejected once, reapplying and putting his plans to start his company on hold, he finally received the coveted O-1.
"Now I'm on the other side because I got my visa approved, but it was a five-month process where my co-founders were like, 'What happens if you don't get the visa? What are we going to do then?'"
"It's highly limiting," he said of immigration processes. "I understand why there are some caps and why there are some visa safety issues, but I think it blocks a lot of high-potential people from coming to the states and growing the economy. In German, they'd say they're 'shooting their own leg.'"
Many top Silicon Valley companies owe their origins to high-potential foreign-born entrepreneurs: Google co-founder Sergey Brin is from Russia; Intel's Andrew Grove is from Hungary; Jerry Yang, who co-founded Yahoo with a fellow Stanford graduate student, hails from Taiwan.
An oft-cited report published by The Partnership for a New American Economy in May 2012 pegs the amount of American Fortune 500 companies founded by an immigrant or child of an immigrant at more than 40 percent. The report also found that 75 percent of companies funded by American venture capital had "one core foreign born team member such as CEO, CTO or VP of Engineering."
These numbers speak to the spirit of Silicon Valley — that regardless of what's handed down from Capitol Hill, immigrants are determined to come here to dream big.
"The people you see coming to Silicon Valley, they're usually people that have some intelligence. ... They'll figure out a way to hack the system," Buckendorf of Blackbox said. "To come from another country, to come here to start a business, you have to be a little bit crazy, right? So immigration is not going to hold you back. If you have the motivation to do that, then you will find a way around immigration."
Tony Lai echoed Buckendorf's sentiments, saying if he for some reason lost his immigration status and had to leave, he would make his career work — but it wouldn't be the same.
"This is a mecca for me and the things that I want to do," he said.
"It's almost so aligned and fundamental to that aspirational part of immigration, which is to pursue your dreams," he added. "Every single immigrant is always moving because they dream of something better. They dream of going to a better place where they can have the opportunities to be able to make something of themselves in a way they couldn't possibly imagine where they were.
"I think that dream is at the core of the American Dream, and I think at the core of this Silicon Valley dream."
TALK ABOUT IT
What experiences have you or your co-workers had with the immigration system? What do you think about the movement by tech leaders to change visa regulations and immigration law? Share your opinion on Town Square, the community discussion forum at www.PaloAltoOnline.com.
This story contains 3290 words.
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