Silicon Valley prides itself on wunderkind tech founders who generate huge sums of money for their Bay Area companies and, sometimes, change industries virtually overnight.
But while Silicon Valley reaps much of the praise for the technology and ideas coming out of the region, it’s a sector relying on immigrants to lead it. More than half of startups valued at $1 billion or more were founded by immigrants to the United States, according to a report from the nonprofit National Foundation for American Policy.
The report found that, of the 582 “unicorn” startups valued at $1 billion or more in the U.S., 319 of them, or 55% had at least one immigrant founder. That number rose to two-thirds when counting companies that were founded or co-founded by immigrants, or the children of immigrants.
Of those 319 companies, 153, or 48%, were founded in the Bay Area, including top industry players such as Stripe, Brex, Instacart, Databricks and dozens of others.
Stripe, an online payment processing company, was founded by John and Patrick Collison from Ireland, while Brex, a financial service company, was started by Henrique Dubugras and Pedro Franceschi from Brazil. Canadian immigrant Apoorva Mehta started shopping delivery service Instacart, while software company Databricks’ founding team is composed of Iranian, Romanian and Chinese nationals.
The findings point to the ongoing centrality of immigration as a driver of one of the United States’ most valuable industries, even though foreign nationals face significant barriers to starting a business in the U.S.
“The findings in the study are noteworthy given there is generally no reliable way under U.S. immigration law for foreign nationals to start a business and remain in the country after founding the company,” the report said.
Immigrant company founders almost always come to the U.S. as refugees, through family reunification visa routes, or on employer-sponsored visas like H-1Bs, which are limited in duration and frequently don’t allow someone to stay permanently, the report said.
“A startup visa to allow foreign nationals who found companies and create jobs would be a critical addition to the U.S. immigration system since it can be difficult for foreign-born entrepreneurs to stay and grow their business,” the report by NFAP Executive Director Stuart Anderson said.
The administration of President Barack Obama created a program to allow international entrepreneurs to come to the U.S. temporarily to work on business ventures, but it didn’t provide a route to a more permanent visa to stay in the country.
The administration of President Donald Trump shuttered the program before it was restarted last year under the Biden administration. It’s unclear how many people have used the program, especially as the pandemic slowed international travel and immigration to a crawl over the past two years.
The Trump administration also created significant cutbacks and processing delays for programs that allowed foreign-born people to work and study in the U.S., premised on the idea they were taking jobs for lower pay from U.S.-born workers.
The program was designed to fill highly skilled jobs when a U.S. citizen can’t be found to fill the job, although it has been used by some large staffing companies to undercut wages in some cases.
Another long-running issue is the huge backlog for certain nationalities to transition to employment-based permanent residency, or green cards, even after being in the U.S. for several years on a high-skilled temporary H-1B visa.
The report found that 66 founders of U.S. startups worth $1 billion were from India, while 54 were from Israel, 27 were from the United Kingdom, 22 from Canada and 21 from China.
But employment-based green cards are subject to country quotas, and the backlog for India could top 2 million people by the end of the decade, according to a Congressional Research Service estimation referenced in the report.
While U.S. universities have long been high-tech proving grounds for talented foreign students, it is also difficult for them to stay in the country after they graduate. H-1B visas and extensions for those who get jobs are an option, but more than 80% of people who apply for the specialty visas are rejected via lottery.
That makes it difficult for young tech talent to stay in the country to work for, or eventually start, the next company worth $1 billion or more.