#StartupsEverywhere profile: Manan Mehta, Founding Partner, Unshackled Ventures
This profile is part of #StartupsEverywhere, an ongoing series highlighting startup leaders in ecosystems across the country. This interview has been edited for length, content, and clarity.
Investing in the innovative ideas of immigrant startup founders
Manan Mehta is a founding partner of Unshackled Ventures, a venture capital fund supporting immigrant entrepreneurs. We sat down with Mehta to discuss how Unshackled Ventures started, the impact of COVID-19 on their investments, and how the government can better support immigrant entrepreneurs.
Could you start by telling us a little bit about your background and how it led you to Unshackled?
I was born and raised in Silicon Valley as a son of immigrants. My trajectory into Unshackled is a bit of a circuitous pathway. When I started my career, coming out of UCLA, I got my first job as an investment banker in the late 2000s doing primarily tech mergers and acquisitions work. I was exposed to a lot of successful immigrants that have companies making some meaningful financial plays in the market. I did that for three years and met a gentleman named Osman Rashid, a Pakistani immigrant, and founder of Chegg, a textbook rental company. He was launching a startup called “Kno,” so I reached out to learn more about it and see if I could be a part of it. He took a bet on me and brought me into the organization. Three years later, I was running the marketing team. We raised about $90 million in capital, and the company was acquired in 2013 by Intel. From there, I went on to launch another company with a co-founder who was an immigrant on an H-1B visa.
I partnered with an immigrant because of an alignment in beliefs, philosophies, and work ethic. As we tried to move forward with our company, we discovered his H-1B visa actually prohibited him from leaving his full-time job to start a company. As a native-born American, I only had to get the blessing of my wife, and that was about it. He didn't have such simple luxuries. This happened in 2013 during the Obama administration—a very different time than what we went through during the last administration. With that experience, we realized many entrepreneurs like us were moonlighting, wanting to go full time, but didn't have the playbook or the ability to build their company. If we were to challenge the status quo and invest in underrepresented entrepreneurs, we actually could grow the size of the pie.
Tell us about Unshackled. What is the work you’re doing?
Starting in 2014 and early 2015, my partner and I decided to build Unshackled Fund One, a $4.5 million investment vehicle that did three things. First, the fund provided friends and family capital. A lot of immigrants don't have access to early-stage investments from someone in their community. The second thing was that if we wanted to support all immigrants, like the ones I was starting a business with, we would need to provide immigration support, including visa sponsorship. Third, the fund provided access to networks. Specifically, influential networks that many multi-generation Americans have access to.
We have since raised about $30 million in two funds and special purpose vehicles, invested in nearly 60 companies who have gone off to raise almost $270 million after us, and are collectively worth about $1.2 billion. They also employ about 600 people now, and if you think about the companies we invest in—it's typically two people with an idea. So, that growth for the last six years has been phenomenal. I think it speaks to the fact that immigrants get the job done and are one of the strongest groups of employers in this country. Retaining and supporting that talent was at the perfect intersection of doing good and doing well at the same time.
At the end of the day, for us, it's really about “how to use capital for good.” The challenges that we're facing as a 21st-century society will likely have positive impacts if we can solve them with humanity. Thinking about Unshackled, we have companies working in a wide array of fields—biotech to space companies. If you think about the through-line, it starts with people, goes to ideas, then goes to humanity. That intersection is extremely powerful and we're lucky that we get to be there at ground zero.
How has the pandemic affected the startup community you invest in? What challenges remain, and what lessons should policymakers take away from this kind of experience?
I think we should remind ourselves that the pandemic started in the last administration. Policies surrounding immigration became a lot more protectionist during the crisis. You saw many executive orders signed that put the fear of God in any immigrant on any visa. Even those on Green Cards were questioning whether they could stay in this country or not. If they left, would Border Patrol let them back in at the airport? That fear was something we had to deal with, and in many ways, our founders did too. Can they still build their companies? Fortunately, we have checks and balances in this country. I'm still a believer in them and because of that, we didn't see a lot of sweeping change except for a few executive orders written within the stated interest of public health, which may or may not have been the case.
We saw a few other things during the pandemic. Our platform was actually very stable. Stability, continuity, and consistency are really important to us. We continually did our work getting visas and founders approved to work on their businesses. I should note, we have now done 150 immigration filings on behalf of our founders with a hundred percent success across the three administrations. From a practical standpoint, things took a little bit longer through the pandemic because they cut the operating capacity of the Department of Homeland Security (DHS) and U.S. Citizenship and Immigration Services (USCIS) in that period, but the outcomes were still there. Providing our founders that confidence was critically important at the start of the pandemic. Since then, with the change in administrations, the rhetoric has become less toxic. Whereas, policy has kind of been status quo by and large.
We also experienced massive growth in deal volume in the venture capital space. It's not surprising that more and more people think they can solve problems as things get more and more challenging.
Things that we're investing in have a tech slant no matter what, but I don't think tech has an industry anymore; I think tech is pervasive. As a result, many tech entrepreneurs are now seeing a lot of benefits from building their companies. More capital was coming in, especially in Q3 last year—it went through the roof. All in all, as the world was pausing and taking inventory of what it believed in, we were seeing a lot of entrepreneurs say, "Hey, I can solve this." Whether it's social justice causes, assisting news outlets in trying to find the truth, or companies focused on the climate and sustainability, we just saw a lot; and hopefully, on this side of the pandemic, we can see that growth continue.
What have been the most critical challenges that you've witnessed founders face while navigating the immigration process, and how can policymakers better enable international entrepreneurs to launch companies in the United States?
Full stop, we need a startup visa. This is an issue with bipartisan support. Yet, it gets caught up in the grinding gears of comprehensive immigration reform. I think it's time to recognize that we are educating, employing, and using U.S. taxpayer dollars for immigrant students and others that immigrate here but are constrained by the current system. Let them build and employ more Americans. We have at least two dozen nations right now trying to recruit them out of our country. None less than Canada, who put billboards on highway 101 in Silicon Valley to recruit immigrants to come build their company there.
If we want to keep the competitive advantage we need, then we need a startup visa. If our legislators can do this independent of every other topic, and maybe take a more integral approach on immigration instead of trying to horse-trade things, I think we'll see that competitive advantage continue. I also think it's really important that we create a very clear pathway for those educated in the U.S. The OPT (Optional Practical Training) visa is nice, but it's short-lived. When you want to get work authorization, there's typically a lottery at the other end of that. There are many more international students who graduate college than there are available H-1B visas every year. I think this points to the fact that it's really important to rethink what we believe is our strongest asset; the university system. It tends to become this generation's Ellis island. That's the port of entry for many immigrants, and I think we should find a way to allow them to stay when they get through there.
We've run 150 immigration filings across 13 different visa types. We are very focused on finding the best legal pathway to staying in the country and building your company. The good thing about U.S. policy is that often there's underlying positive intent on keeping the best talent. If you can articulate a good case to the adjudicators wherever you are, whether it's Texas, California, or Nebraska, they tend to be responsive. We've been fortunate that we had success for seven years doing this and being very meticulous about it. It's putting a lot of entrepreneurship in play because of it.
Are there any other startup-facing issues that you think should be receiving more attention from policymakers?
I think there are several angles people can focus on. You see some challenges with public financing for startups with a lot of overhead tied to it. For example, if you want opportunity zone funding, the vast amount of paperwork and reporting that you have to do might make it unattractive overall. To the extent we can change the framework around the reporting and the dynamics of public financing, the government could streamline these things. Likewise, the Paycheck Protection Program process was such a nightmare for so many people. That's a great example of when the government tends to over-engineer, and then they forget that they don't need to. Hopefully, we can streamline things and maybe approach policy, not from the 2 percent who will take advantage of a program, but from the 98 percent that need it.
What are your, what are your goals for Unshackled moving forward?
The goal is to create 100,000 jobs by supporting immigrant entrepreneurs at day zero. We have a long way to go. Luckily, we're a relatively young team, so we have time on our side. It's about owning this population's opportunity, providing them a chance to do what they want to do with the resources they need, and scaling dramatically across the country.
We already have founders in nine different states. We don't concentrate on the coastal cities because immigrants are everywhere. They have an affinity to go anywhere; even in so-called fly-over states, there are a lot of opportunities. Our objective is to be pervasive throughout all 50 states.
All of the information in this profile was accurate at the date and time of publication.
Engine works to ensure that policymakers look for insight from the startup ecosystem when they are considering programs and legislation that affect entrepreneurs. Together, our voice is louder and more effective. Many of our lawmakers do not have first-hand experience with the country's thriving startup ecosystem, so it’s our job to amplify that perspective. To nominate a person, company, or organization to be featured in our #StartupsEverywhere series, email ian@engine.is.
