A Bad Immigration Idea

There aren't many outlets more supportive of immigration and entrepreneurship than this one, as the review we ran the other day of Immigrant, Inc. suggests. But of all the ideas to encourage immigration and entrepreneurship, one of the worst has to be the one floated in today's Wall Street Journal by Paul Kedrosky and Brad Feld: "If immigrant entrepreneurs want to start a company in the U.S. and are able to raise a moderate amount of money (perhaps as little as $125,000) from an accredited U.S.-based venture capital firm or qualified U.S.-based angel investors, we should let them start a company here." The troubling words in this sentence are "accredited" and "qualified." It amounts to another way of priviliging some investors over others in the flow of potential deals. Some government agency tied up in the immigration bureaucracy is going to end up accrediting venture capitalists. One of the many great things about immigrants to America is that it's hard even for a mighty government-accredited venture capitalist to tell ahead of time which of them, or their children, is going to succeed. Sergey Brin's father had worked as a central planner at Gosplan, the Soviet Central planning agency. Would some angle investor or venture capitalist have made a bet on him? Probably not. But his son started Google. Instead of making it easier for immigrants to come to America by raising the annual limits or by automatically stapling a green card to the diploma of every foreigner who gets an advanced degree at an American university, Mr. Kedrosky and Mr. Feld's idea would create a new hurdle, a new "accredited venture capitalist" hoop to jump through for would-be immigrants who might be merely seeking freedom and the rule of law. As it is, venture capitalists are known for extracting the best deals they can in term sheets on funding from entrepreneurs, so much so that there are entire Web sites set up for the purpose of allowing venture-funded companies to complain about their funders. With the additional leverage of an immigration visa to America, imagine how quickly the VC is going to wind up with 95% of the company, and the founder with next to nothing. Sure, let's encourage immigrant entrepreneurship, but find a way to do it without turning venture capitalists into an arm of the immigration bureaucracy, with all the sclerosis and government power that that entails.