For years, the startup and tech communities have been advocating for a pathway that would encourage the most promising immigrant entrepreneurs to start and scale their companies in the U.S. While no program currently allows for this, a recent proposal from the White House could change that. The International Entrepreneur Rule, proposed by the U.S. Citizenship and Immigration Services (USCIS) in August, will allow qualifying foreign entrepreneurs to live in the U.S. to build their startup for up to five years. On Monday, Engine and New York-based technology trade group Tech:NYC submitted comments supporting the rule and recommending a number of targeted modifications, which we believe will allow the Rule to have an even greater positive impact. You can learn more and read the full comments here.
At Engine, we’ve seen firsthand some of the extraordinary contributions that immigrant entrepreneurs have made to the startup economy. One-third of U.S. venture-backed companies that went public between 2006 and 2012 had at least one immigrant founder. Moreover, immigrant entrepreneurs started, in whole or in part, some of the most important technology companies of our time, including Google, Intel, Yahoo!, eBay, and WhatsApp. In fact, the United States was home to almost 2.9 million foreign entrepreneurs who generated $65.5 billion in business income in 2014.
Engine and Tusk Ventures have released our second “Grading the Candidates on Tech” report card, this time focusing on the candidates in some of November's tightest Senate races. We evaluated the candidates in eleven different contests based on their positions on key issues including broadband access and infrastructure, intellectual property, data security and privacy, and talent acquisition. The report card showed there were no overall leaders in the pool of 22 candidates and all but four candidates received an “incomplete” on a key issue on their respective report cards. The grades also reveal that many have failed to outline or champion any tech policies throughout their political careers, with data security and privacy receiving the most “incomplete” grades due to the lack of unbridled advocacy in supporting reforms to U.S. government surveillance laws. View the full analysis here.
Today, Engine Advocacy and Tusk Ventures released their second “Grading the Candidates on Tech” report card, this time grading the positions that candidates for the U.S. Senate are taking with key issues facing startups and the innovation economy. Twenty-two candidates were rated based on their level of support, understanding, and familiarity with technology and the priorities of the nation’s startup community. Final grades reflect candidates' positions on key issues including broadband access and infrastructure, intellectual property, data security and privacy, and talent acquisition.
With a population of almost 3 million (that is growing by 100,000 every year), ten Fortune 500 companies, and a strong network of regional universities, it may be unfair to call Denver a city on the rise. However, Denver residents will be the first to recognize that the city’s environment for early stage entrepreneurs and startup innovation is continuing to develop and there is still a lot of room for the city to grow. The Rise of the Rest tour, with Steve Case at the helm, spent its second day on the road in Denver to learn from the successes and challenges of the ecosystem and inspire the wider business, policy, and educational leaders in the area to support its many entrepreneurs.
In the 1860s, the First Transcontinental Railroad was constructed, connecting Omaha, NE to Sacramento, CA. It was fitting, then, that we kicked off Rise of the Rest’s western tour with a symbolic visit to to Lauritzen Gardens, the original site of the railway. While the rail line was one of Nebraska’s earliest “startups,” today there is a new startup scene taking hold in Omaha and Lincoln—one fueled by growing investment, exceptional local talent and ideas, and a unique culture around support and community.
An Engine-championed bill that would make it easier for startup employees to exercise their stock options cleared important hurdles in Congress this week. Yesterday, the House of Representatives passed the Empowering Employees Through Stock Options Act, and a companion bill cleared the Senate Finance Committee earlier in the week. Even with partisan divisions higher than usual in this contentious election year, Democrats and Republicans came together to support EESO, passing the bill unanimously in the Senate Finance Committee and with substantial bipartisan support in the House. As we’ve written in the past, because employees exercising certain types of stock options must pay an immediate tax upon exercise (even though there is no public market on which to sell some of the newly acquired shares to pay the tax), startup employees are often unable to purchase their shares, making it difficult for startups to attract and compensate top talent. EESO allows employees to defer the tax payment on options for seven years or until the underlying shares are actually sold, providing workers with the flexibility they need to realize the value of their contributions to their companies. We are hopeful that the full Senate will consider the bill as expeditiously as possible so that it can head to the President’s desk before the end of his term.
Today, the U.S. House of Representatives passed the Empowering Employees through Stock Ownership Act (H.R.5719), which will encourage startup growth by making it easier for employees at private companies to exercise their stock options. The following statement can be attributed to Engine Executive Director Evan Engstrom:
On Wednesday, the House Ways and Means Committee voted to approve the Empowering Employees through Stock Ownership Act (H.R.5719), legislation that will make it easier for startup employees to exercise their options. Two days prior, Engine led a letter signed by over 50 startups expressing support for the bipartisan bill, which would allow employees to defer the tax liability they owe when they exercise illiquid stock options for up to seven years or until there is a liquidity event (whichever happens first). As the letter notes, the bill “will make it possible for more employees to obtain an ownership stake in the companies they help build and make it easier for startups and private companies to attract the talent necessary to grow the economy.” The bill is scheduled to face a floor vote in the House later next week, and the Senate Finance Committee is also likely to consider it before the Senate recesses next Friday.
As a non-profit policy organization committed to making the world better for startups, Engine has a long history of engagement on copyright reform issues. Indeed, Engine began as an effort to harness the political power of the startup community that emerged from the tech world’s fight against the ill-fated SOPA/PIPA copyright bills. While the SOPA/PIPA battle remains a critical milestone in the emergence of tech as a political force, our work to return copyright law to a system that promotes rather than hinders innovation is only beginning. To help further this crucial mission, we are proud to join the Re:Create Coalition, a group of creators, innovators, and users working to ensure that copyright laws are balanced and foster innovation, creativity, and economic growth.
Equity compensation, often in the form of stock options, is a critical tool used by startups to attract, retain, and incentivize quality employees. But stock options have a downside: current tax law requires that employees pay an immediate tax when they exercise their options, usually long before they can sell those stocks to realize their full economic value. Fortunately, a bill being considered today by the House Ways and Means Committee could remedy this problem.
There are countless startups that provide platforms through which individuals can share feedback and unbiased reviews of the businesses and services they rely on. These platforms are integral to the internet economy and consumers depend on them to inform their decisions on everything from where to grab drinks to which dentist to see. Protecting freedom of speech on these platforms is critical. But non-disparagement and gag clauses silence legitimate criticism, rendering these platforms less useful and harming the broader internet ecosystem. Engine welcomes the House’s passage of the Consumer Review Fairness Act, which would outlaw these gag clauses and go a long way towards protecting consumers’ right to share their thoughts and opinions freely in the digital marketplace.
Never a fan of net neutrality, AT&T has upped the ante on controversial zero-rating programs, announcing a new program this week that will allow subscribers to stream video from DirectTV (a company AT&T owns) without consuming data under the company’s data caps. This means that AT&T is giving preferential treatment to its own data and putting all other video providers at a clear competitive disadvantage. While other programs like T-Mobile’s BingeOn service have tried to avoid the most egregious net neutrality violations by allowing any video service to participate in the zero-rating program without payment, AT&T’s program seems to directly implicate the Federal Communications Commission’s Open Internet Order.
Today, the House of Representatives passed a package of bills that will improve the capital access landscape for innovators across the country. The package included two pieces of legislation championed by Engine: the Micro Offering Safe Harbor Act (H.R.4850) and the Private Placement Improvement Act of 2016 (H.R.4852). With the approval of these two bills, the House has now passed four of Engine’s 2016 legislative priorities related to capital access.
Engine is looking for startups, entrepreneurs, and the organizations that support them to sign our letter telling Congress that startups care about broadband competition. Startups, businesses, and other institutions often need significantly more internet bandwidth than consumers use at home, so they rely on what are known as “business data services” (BDS) to deliver high-speed, high-capacity connectivity. Unfortunately, the BDS market is dominated by a few broadband gatekeepers that distort the market and jack up prices for startups and other customers. But that could change soon: the Federal Communications Commission (FCC) is in the process of a rulemaking that will introduce competition and lower prices in the BDS market.
The startup community has been fighting for years for reforms that would allow the world’s brightest innovators to start and scale their companies here in the United States. Engine welcomes the Department of Homeland Security’s International Entrepreneur proposal, which will allow talented foreign-born entrepreneurs to build their companies in the U.S., in turn creating jobs and driving economic transformation. Today’s announcement is an important step towards making our immigration system work for the 21st century innovation economy.