Navigating Immigration Challenges for Tech Startups: A "Dear Sophie" Update

This is another installment of “Dear Sophie,” a resource dedicated to addressing immigration questions specifically related to the technology sector.

Sophie Alcorn, a Silicon Valley-based immigration lawyer, emphasizes the importance of these inquiries. She states that these questions are instrumental in disseminating knowledge, empowering individuals globally to overcome geographical limitations and achieve their aspirations.

Access to the weekly “Dear Sophie” column is available to Extra Crunch subscribers. A 50% discount is offered on one- or two-year subscriptions using the promo code ALCORN.

Dear Sophie:

Our company submitted two H-1B petitions during the recent lottery. Unfortunately, both applications were unsuccessful.

One applicant is my business partner, and the other is currently on Optional Practical Training (OPT). We are concerned about the possibility of them being required to depart the United States. What potential solutions are available to us?

— Concerned in Los Angeles

Dear Concerned:

It’s understandable to feel anxious, but there are several viable immigration routes to consider for both your co-founder and your employee on OPT. Let's explore a number of possibilities.

Potential Immigration Pathways

A recent podcast featuring my colleague, Nadia Zaidi, and myself provides a more detailed explanation of these options.

• Explore Alternative Visa Options: Beyond the H-1B, investigate other visa categories that might be suitable.
• Consider E-2 Treaty Investor Visa: If your co-founder is a national of a treaty country, the E-2 visa could be a pathway.
• Review O-1A Visa Eligibility: For individuals with extraordinary ability or achievement, the O-1A visa may be an option.
• Investigate L-1A Visa: If your co-founder has worked for a qualifying organization abroad, the L-1A visa could be considered.

I aim to provide inspiration and a sense of optimism regarding these possibilities. However, it is crucial to seek guidance from a qualified immigration attorney.

A personalized consultation with an immigration lawyer – such as myself – is highly recommended. The optimal strategy is determined by individual circumstances, including immigration history and the specific objectives of your startup.

Immigration Pathways for Co-founders

For startups that have secured funding, a viable alternative to the H-1B lottery exists: the Cap-Exempt H-1B visa. This presents a mutually beneficial opportunity, particularly for co-founders with a background in STEM fields – and potentially even those without – supporting both startups and international talent, while also providing enhanced project-based learning experiences for U.S. STEM students.

This advantageous option stems from specific legal provisions. Certain employers are permitted to petition for an H-1B visa at any time, bypassing the annual lottery process. These entities, termed cap-exempt employers due to their exemption from the 85,000 visa limit for for-profit organizations, include:

• Higher education institutions.
• Nonprofit organizations affiliated with colleges and universities.
• Nonprofit research institutions.
• Governmental research organizations.

Should your co-founder secure a part-time H-1B visa through one of these cap-exempt employers, your startup can simultaneously sponsor them for an H-1B visa, irrespective of the recent lottery outcomes.

I strongly recommend exploring the Open Avenues Foundation and their Global Talent Fellowship to leverage this legal provision. This program enables international professionals to obtain cap-exempt H-1B visas by mentoring university students for approximately five hours weekly in practical, project-based work relevant to their expertise, all under the sponsorship of the nominating startup.

This arrangement allows the candidate to reside in – or relocate to – the U.S., provides your startup with a student team contributing to a beneficial project, and enhances diversity within your recruitment efforts, while simultaneously offering U.S. students valuable, hands-on STEM learning opportunities.

With the initial cap-exempt H-1B in place, your startup can then submit a petition for a second, concurrent Cap-Exempt H-1B visa specifically for direct employment within the company.

Alternative avenues exist for those outside of STEM. If a university is willing to host your co-founder at no cost, a partnership with OAF may be possible. Furthermore, numerous U.S. universities offer entrepreneur-in-residence programs designed to assist international co-founders in qualifying for concurrent Cap-Exempt H-1B visas. Exploring an O-1A visa or a change of status for your co-founder is also advisable.

Another potential route is the International Entrepreneur Parole (IEP), a 30-month immigration status within the U.S. Established by President Obama, the International Entrepreneur Rule (IER) represents the closest equivalent to a dedicated startup visa currently available in the U.S. Despite attempts by the Trump administration to dismantle it, the National Venture Capital Association, under Jeff Farrah’s leadership, successfully defended the program in federal court, ensuring its continued availability.

Due to limited awareness, I am actively seeking international startup founders with compelling cases to file for IEP, aiming to validate the program and demonstrate its viability. We are currently identifying founders holding at least 15% equity in a U.S. startup less than five years old that has secured at least $250,000 in funding from U.S. investors. Interested parties can join our free interest list by completing this form, and we will contact those with promising applications.

If your co-founder desires permanent residency in the U.S., initiating the green card process is recommended, such as pursuing the EB-1A green card for individuals with extraordinary abilities or the EB-2 NIW (National Interest Waiver) green card for those with exceptional abilities. The EB-1A generally offers a faster processing time, but its eligibility criteria are more stringent than those for the EB-2 NIW.

F-1 OPT Employment Pathways

Employees holding F-1 OPT status who completed a qualifying STEM degree are eligible to apply for a 24-month extension of their work authorization, commonly referred to as STEM OPT. This extension permits the employee to continue their employment within the United States.

Concurrently, the employer can re-register the employee for participation in the annual H-1B lottery. Should STEM OPT not be a viable option, exploring the Cap-Exempt H-1B pathway, as previously detailed, is recommended.

Advanced Degree Considerations

F-1 OPT employees possessing only a bachelor’s degree may benefit from pursuing further education. Individuals who obtain a master’s degree or a higher academic credential from a U.S. institution generally experience improved selection probabilities in the H-1B lottery process.

This advantage stems from the allocation of 20,000 of the 85,000 annual H-1B visas specifically for candidates holding a master’s or doctorate from a U.S. university.

Upcoming Changes to the H-1B Lottery

It’s important to note that the upcoming H-1B lottery is anticipated to transition from its current random selection method to a system prioritizing higher wages.

Unless altered by the current administration, a policy established by the preceding administration will be implemented, favoring employers offering H-1B candidates a Level III wage or greater in their selection process.

Wage Level Implications

Employers sponsoring H-1B candidates are legally obligated to pay the higher of either the actual wage for the position or the prevailing wage. The prevailing wage is categorized into four levels, determined by the required experience and the geographical location of the job.

Level I represents entry-level positions, while Level IV signifies roles demanding substantial experience. This shift towards a wage-based system is expected to introduce more predictability into the H-1B selection process.

However, early-stage startups and smaller companies may encounter challenges in competing with larger, more established organizations regarding salary offerings, as stock options and equity are excluded from the wage calculation.

Seeking Legal Counsel

For exploration of alternative visa solutions, consulting with a qualified immigration attorney is always advisable. It is hoped that these outlined options empower you with a clear understanding of the available choices and control over the situation.

Remember, you have options available to you!

All my best,

Sophie

Do you have a question for Sophie? Submit it here; we retain the right to edit submissions for clarity and length.

Please be aware that the information presented in “Dear Sophie” is intended for general informational purposes only and does not constitute legal advice. For a comprehensive understanding of the limitations of “Dear Sophie,” please refer to our complete disclaimer. Direct contact with Sophie is possible through Alcorn Immigration Law.

Sophie’s podcast, “Immigration Law for Tech Startups,” is accessible on all major podcasting platforms. She is currently accepting applications from individuals interested in being guests.