Startup News Digest: 4/7/17

Our weekly take on some of the biggest stories in startup and tech policy. To receive this weekly digest in your inbox, sign up at

White House Cracks Down on H-1B Program. H-1B season kicked off on Monday, and while the the White House missed the opportunity for a larger overhaul of the program before the lottery opened, the Administration did slip in a few changes at the last minute that have made the already chaotic process of applying for H-1Bs even more frenzied. Late last Friday, U.S. Citizenship and Immigration Services (USCIS) quietly issued a policy memo indicating a more rigorous vetting process for computer programmers. While the changes are mostly cosmetic in nature (USCIS has maintained that the guidance is a clarification of existing policy, not a “policy change”), the agency also announced on Monday that it would be increasing the number of targeted site visits to crack down on H-1B abuse and fraud. The same day, the Justice Department issued a strong warning that employers seeking H-1B visas must not discriminate against American workers. On their own, each of these changes is arguably meant to target outsourcing firms and abuse of the system, not technology companies (most of whom reserve their visas for more complicated, higher paying roles that cannot be filled by U.S. workers). But taken together, they indicate an intentional effort by the President to deliver on his campaign promise to “end forever the use of the H-1B as a cheap labor program, and institute an absolute requirement to hire American workers first for every visa and immigration program.” We’re tracking.

Cap Access Bill Passes House. On Thursday, Congressman Patrick McHenry’s (R-NC) Supporting America’s Innovators Act (H.R. 1219) passed the U.S. House of Representatives for the second year in a row by a vote of 417-3. The bill, which Engine strongly supports, would remedy what is known as the “99 Investor Problem.” Under current securities law, the number of investors who can act as a coordinated group to invest in a company is capped at 99. As online fundraising and general solicitation have increased in popularity, it has become a common practice to group investors into what are known as investment LLCs, or “syndicates,” to mitigate risk, simplify cap tables, and diversity portfolios. However, these syndicates are limited to 99 investors, an outdated cap that excludes sophisticated investors from funding the startups that they want to and limits the capital available to companies. H.R. 1219 would remedy this by raising the investor cap to 250, and we are hopeful that the Senate will take up and pass this legislation in the near future.

Stakeholders Unite in Support of the OPEN Government Data Act. On Wednesday, the Center for Data Innovation sent a letter to congressional leaders urging them to support the OPEN Government Data Act (S. 760, H.R. 1770), which would ensure that government data is accessible to the public by default. The 80 signatories, including Engine, argued that in recent years, open government data has “proven to be an enormously effective platform for innovation in both the public and private sectors, supporting significant economic value, increasing transparency, efficiency, and accountability in government operations, and powering new tools and services that address some of the country’s most pressing economic and social challenges.” The proposed legislation would require federal agencies to publish data in open formats and adopt consistent data practices across the government. Engine, who has long been a supporter of open data, published a report on the topic last month and hosted a congressional briefing to discuss its findings.

Leaked Documents Show Waste and Fraud at the Copyright Office. This week, Techdirt obtained previously unreleased documents showing that under the management of former Copyright Register, Maria Pallante, the Copyright Office spent nearly $11.6 million on a project to replace its computer system. The initiative, which was set to cost only $1.9 million when approved, was scrapped before completion. Further complicating this scandal, Rep. Zoe Lofgren (D-CA) recently revealed during a House Judiciary Committee markup that Pallante had also previously put in place a fake $25 million budget line item, asking the Librarian of Congress to testify under oath what it was for, despite having no actual purpose. All this information comes to light as House Democrats find themselves divided over H.R. 1695, which passed through the Judiciary Committee last week. The bill would remove the Copyright Office from the purview of the Library of Congress by making the position of Copyright Register a Presidentially appointed position approved by the Senate. Many speculate this piece of legislation was introduced in response to a move by the Librarian of Congress, Carla Hayden, last fall that removed Maria Pallante from the role of Register.

This Week’s #StartupsEverywhere Profile: Courtney Klein and C’pher Gresham in Phoenix, AZ. This week we chatted with two startup ecosystem builders in Phoenix, AZ. Courtney Klein, the founder of SEED SPOT, and C’pher Gresham, SEED SPOT’s National Director of Expansion, talked to us about how they are working to provide early-stage social ventures with the support and resources they need to succeed. Read the full interview here.