US policy deters international startup emigration

Canva CEO Melanie Perkins chats with investors Lars Rasmussen (left) and Bill Tai. Credit: Canva

Tight US immigration laws could be closing the “brain drain” of foreign startups that defect to Silicon Valley, according to startup investors Bill Tai and Lars Rasmussen.

Tai and Rasmussen, investors in Sydney startups Canva and Posse, spoke this morning at a breakfast hosted by Canva. Tai is an American investor in startups and the founder of MaiTai, a networking event with startups and kite boarding. Rasmussen is director of engineering at Facebook and co-created Google Maps when he worked for Google Australia.

“There’s definitely a big sucking sound that pulls everyone to the United States,” said Tai. “But I think things have also been changing in that regard.”

One big reason is that US immigration has been “getting tighter and worse,” he said. “The American legislature has done the world’s startup community a great favour by making the immigration rules that they have, because there are now startups blossoming all around the world.”

Rasmussen said big tech companies are opening international offices as a result.

“Facebook has had to establish in London because more than half of the engineers that Facebook hires from outside the US don’t get a visa to go to the US.”

Rasmussen said he doesn’t believe the immigration laws have greatly changed, but the need for engineers has grown tremendously and US laws haven’t kept up.

“The same quota that was there 10 years ago just isn’t enough. It used to take nine months of the year before the US immigration quota ran out. Now it takes three days.”

Australian startups can access E-3 visas, which have a much more generous limit than the employment visas that other nationalities can apply for.

Concern about losing Australian startups to the US and other countries flared up earlier this year after one of the country’s biggest success stories, Atlassian, decided to register as a UK business.

However, Canva CEO Melanie Perkins said she does not feel compelled to move her startup's headquarters abroad. "I don't feel any pressure to do anything other than build for our company."

Tai noted several challenges faced by Australian startups, including distance, size of market, density of talent and access to capital. In comparison, Silicon Valley startups tend to have a much easier time securing funding and attracting talent to join the team, he said.

In Silicon Valley, there is “the ability for someone to get off the starting line and just go and win,” he said. “If the market timing is right, it’s going to happen there.”

However, the hurdles for Australian companies are lowering, he said. “Going forward, I think the issues are becoming less and less because time and space are compressing because of the Internet.”

“Companies like Atlassian and others have become the leaders in their categories … There’s not lots of them, but there’s a few that are like that, and I think as those things happen more often, the talent levels kind of catch up and I think it become a little more seamless.”

Rasmussen urged Australian startups to look overseas for funding. “In order to be a successful startup in Sydney, you don’t have to rely solely on an ecosystem that is in the same [place],” he said.

Good ideas are good ideas no matter where they come from, said Tai. “I have plenty of opportunities to [invest] in the USA, and there’s … a high barrier to come all the way over here and fund startups.”

But after being impressed with a few Australian startups, he chose to invest here anyway.

Adam Bender covers telco and enterprise tech issues for Computerworld and is the author of dystopian sci-fi novels We, The Watched and Divided We Fall. Follow him on Twitter: @WatchAdam

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