Global Detroit, U-M Team on Program to Boost Immigrant-Led Startups

The American Dream was once a fairly simple concept: The nation would welcome strivers from across the world and invite them to pull themselves up by their bootstraps, work hard, pay taxes, and become contributing citizens. However, immigration has become a highly charged political issue in the current era, making things more complicated.

That’s one reason Global Detroit and the University of Michigan’s Economic Growth Institute have partnered on a program to help international student and immigrant entrepreneurs stay in the Great Lakes State and launch companies.

Called Global Entrepreneur-in-Residence (EIR), the program places foreign-born startup founders at universities to work as business coaches and mentors for up to 20 hours per week, which makes them eligible for H-1B visas. In between coaching duties, founders will work on building their startups with the goal of creating jobs for Michiganders. The William Davidson Foundation has provided support to run Global EIR at U-M for at least three years.

“It’s a coordinated effort to help immigrant startup founders more systematically,” says Steve Tobocman, Global Detroit’s executive director. “It started at the University of Massachusetts [in 2015] with a handful of entrepreneurs and then grew over time.”

Tobocman says the appeal of Global EIR is twofold: it has proven to be a legitimate way to assist immigrant founders in starting businesses and becoming permanent residents, and it’s a way to establish more high-growth startups no matter what’s happening with immigration policy at the federal level.

“As we get further away from comprehensive immigration reform and more into gridlock even on things that have widespread agreement,” international students and startup founders have been caught in the crossfire, Tobocman says.

International entrepreneurs have long played a key role in the US economy, particularly in Southeast Michigan. Tobocman notes that over the past 25 years, immigrants have helped launch one-quarter of all American tech startups. Of 87 “unicorn” startups that have valuations over $1 billion, more than half were launched by immigrants—nearly half of whom first came to this country as international students. As Rust Belt states like Michigan continue to struggle with brain drain and population loss, highly skilled immigrants have been a source of economic growth and job creation, he adds.

H1-B visas are intended for foreign-born workers in largely high-tech fields and must be sponsored by an employer. In 2003, the government cut the cap on the number of H1-B visas to 65,000 per year, meaning they are now highly sought after and in short supply. Because it’s hard to get an H1-B, some international students who stay in the US after graduation to start a business find themselves running out of time if their visas expire before they can get their companies off the ground. However, the H1-B cap does not apply to universities because the jobs they provide have an educational component, giving Global EIR participants a pathway to stay longer.

The nonprofit Global EIR program came about, says executive director Craig Montuori, as a result of advocacy work on behalf of a federal startup visa about a decade ago. Montuori, Foundry Group co-founder Brad Feld, and Flybridge Capital Partners co-chair Jeff Bussgang were frustrated with Beltway gridlock—even today, there is still no federal startup visa—and wanted to find a way to help foreign-born entrepreneurs that didn’t require the involvement of politicians or government permission.

Montuori says the Global EIR flagship program at UMass Boston, which has collected the most data, has supported 57 entrepreneurs since its inception in January 2015, attracted $440 million in investment capital, and created 886 jobs. Fourteen Global EIR programs have launched since 2015, with some more active than others. Global EIR provides the framework and guidance to colleges and universities, and they comes up with their own funding.

Montuori says the program had long been interested in starting a Detroit-area chapter, … Next Page »

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Sarah Schmid Stevenson is the editor of Xconomy Detroit/Ann Arbor. You can reach her at 313-570-9823 or sschmid@xconomy.com. Follow @XconomyDET_AA

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