DOE Pilot Improves Student Access to Tech Bootcamps

Last week, the Department of Education announced a pilot program that will allow federal financial aid to be used toward coding bootcamps and similar “nontraditional” educational programs. The EQUIP (Educational Quality Through Innovative Partnerships) program will make it easier for students who rely on federal aid to access these in-demand educational programs. It will also provide an opportunity for the Department to evaluate the effectiveness of these programs and explore how to best monitor their quality.   

In recent years, the prevalence and popularity of coding bootcamps and other nontraditional education programs have skyrocketed. According to the Education Department, coding bootcamps will graduate 240 percent more students in 2015 than they did in 2014, up from 6,740 to over 16,000 graduates.

This growth is not surprising—as the 21st century economy requires an increasing number of skilled workers, these institutions have risen to meet demand. The courses they offer help to alleviate current pipeline problems by channeling talented individuals into open, high-paying positions. General Assembly, one of the largest and most established bootcamps, reports a 99 percent placement rate in the field of study. And overall, 75 percent of coding bootcamp graduates are finding employment in their field of study and see a 44 percent increase in income according to a 2014 study.

However, there is still a significant roadblock in place: students of most of these nontraditional programs do not qualify for federal financial aid.

Imagine this: you’re a single parent working in an entry-level programming position. You’re looking to advance your career and have read about the emerging field of data science. You don’t have the resources—time or money—to attain a four-year degree in data science, but you find an interesting immersive “bootcamp” program that will train you in data science in just twelve weeks.

Even though this specialized program will train you at a fraction of the cost and duration of a traditional degree, in most cases you would not be able to obtain a federal student loan to help pay for it.

There are two main reasons for this: First, in order for an institution to be eligible for federal aid, it must be accredited. The accreditation process is complicated and ill-equipped to assess these sorts of innovative programs whose courses are constantly evolving based on market demand. As we’ve written before, nearly all modern coding bootcamps and schools lack accreditation.

Compounding the problem is a restriction on accredited colleges that limits the types of partnerships they can have with nontraditional education groups. For example, colleges offering federal aid cannot outsource more than 50 percent of any given program to third party institutions. So, if a resource-deprived community college wants to partner with an outside institution to offer a new program in an emerging field like data analytics, they can only do so if the outside institution offers less than 50 percent of the curriculum, assessment, or faculty.

These limited partnerships have been successfully attempted by several educational companies—General Assembly with Boca Raton's Lynn University; edX with Arizona State University; Galvanize with the the University of New Haven—but there is still huge untapped potential being stifled by overly-restrictive and outdated rules.

The EQUIP program aims to change this by loosening restrictions on schools that want to do innovative work with an alternative education provider. The program waives the existing 50 percent outsourcing prohibition for selected institutions under two conditions: a third party “Quality Assurance Entity” evaluates the outside partner and the college’s accreditor approves it.

While the scope of the pilot will be relatively small, this balanced step will allow the Department to evaluate a model that could later be expanded to cover any partnership between an accredited institution and a nontraditional program.  

Right now the innovation economy desperately needs skilled individuals. Creative initiatives like the EQUIP program are a sensible way for the federal government to rise to meet this challenge and we hope to see more efforts like this one in the future.

Startup News Digest 10/16/15

Our weekly take on some of the biggest stories in startup and tech policy.

Federal Aid for Coding Bootcamps. On Wednesday, the U.S. Department of Education announced a new pilot program that will make it easier for a more diverse range of people to attend alternative education programs like coding bootcamps. Until now, students enrolled in “nontraditional” educational programs have not been eligible for federal financial aid.  The new EQUIP (Educational Quality Through Innovative Partnerships) program will waive existing restrictions to allow federal aid dollars to be used towards approved alternative programs. While the scope of the pilot will be relatively small, this initiative is a great move by the Dept. of Ed towards making these popular and essential programs more accessible to all.

White House Opts Against Legislating Back Door for Encryption. At the end of last week, the White House made a long awaited decision: they would not push for legislation that would mandate companies be able to decode messages at the request of law enforcement. At least, that’s what they’ve decided for now. Even if the White House’s decision maintains status quo, advocacy groups worry about the White House’s definition of “strong encryption” and whether the Administration will “weaken security through other methods.”

EU Safe Harbor Ruling. Ars technica takes a deeper look at the far-reaching consequences of the EU’s safe harbor ruling in an article published on Thursday. Evan covered the impact this ruling will have on startups in a blog post last week, noting that “while larger companies have quickly moved to establish new legal pathways for importing EU data or have secured data centers in the EU, smaller companies face a more daunting task in trying to comply with now unclear data protection rules.” Ars goes even further, arguing that this ruling will have a dramatic effect beyond short-term global commerce—it will likely impact future trade agreements between the U.S. and EU, as well as the UK’s surveillance practices.

Evidence of “Over-Removal” by Intermediaries. When intermediaries receive a take-down request, the easiest, least risky response is to take down the cited material - especially for small companies that don’t have the resources to hire a legal team to thoroughly evaluate each request. A literature review by Stanford revealed growing amounts of empirical evidence of “over-removal” by intermediaries (e.g. Google, Twitter, Facebook), further defining a problem that puts free-expression at risk.

Wyden Calls for Greater DMCA Exemptions. As the U.S. Copyright conducts its periodic review of requests for exemptions under the Digital Millennium Copyright Act (DMCA), the agency should consider the importance of these exemptions to the  continued expansion and improvement of American technologies, Sen. Ron Wyden explained in this week’s Wall Street Journal. Wyden expressed his concerns about the EPA and FDA’s pleas to limit exemptions for new software in cars and medical devices, thereby prohibiting such new technologies from being legally tinkered with under the DMCA. Sen. Wyden and Rep. Jared Polis (D-CO) have introduced the Breaking Down Barriers to Innovation Act, a bill that aims to streamline “the process to obtain exemptions to the DMCA to promote scientific research, innovation and the fair use of copyrighted works.”

Better Crowdfunding Policy. In anticipation of the SEC’s impending release of the Title III crowdfunding rules, Engine published a white paper this week, “Financing the New Innovation Economy: Making Investment Crowdfunding Work Better for Startups and Investors.” The paper analyzes trends in U.S. and U.K. crowdfunding markets, which offer important lessons for U.S. regulators and lawmakers as we move closer to launching investment crowdfunding for retail investors.

In Celebration of Ada Lovelace. On Tuesday we commemorated Ada Lovelace Day and celebrated the achievements of the first programmer and women in science and technology everywhere. News from Stanford emphasized progress: 214 women have enrolled as computer science majors, 30% of all enrolled computer science students.

Startup News Digest 10/9/2015

Our weekly take on some of the biggest stories in startup and tech policy.

ECJ Invalidates Data Safe Harbor. On Tuesday, the European Court of Justice (ECJ) invalidated the European Commission’s “safe harbor” rules that permitted U.S. companies to self-certify compliance with European data protection rules in order to legally transfer EU customer data to the U.S. The court determined that U.S. legislation permitting the NSA to secretly collect and review consumer data was inconsistent with the EU’s Data Protection Directive. Consequently, the safe harbor framework was itself inconsistent with the Directive, as U.S. companies could not claim to have adequate data security protections in place. While larger companies have quickly moved to establish new legal pathways for importing EU data or have secured data centers in the EU, smaller companies face a more daunting task in trying to comply with now unclear data protection rules.

Governor Brown Signs CalECPA. In a huge victory for startups and digital privacy, Governor Jerry Brown signed the California Electronic Communications Privacy Act (SB178), now the nation’s best digital privacy law, on Thursday. This landmark bill (which we’ve covered in past digests) updates digital privacy laws by requiring law enforcement to obtain a warrant before accessing an individual’s electronic communications. We are hopeful that this action by California will prompt similar movement in other states or at the federal level.

Closing the Gender Gaps. California passed a (another) landmark piece of legislation that would require women to be paid the same as men for doing “substantially similar work.” Though the governor acknowledges that this bill won’t solve the problem, he expects it to “help accelerate [the] progress.” It’s an interesting development in light of the dialogue in Silicon Valley regarding the promotion and retainment of women in the tech industry. Meanwhile, on the federal level, Senators Maria Cantwell (D-WA), David Vitter (R-LA) and Jeanne Shaheen (D-NH) introduced a bill that would reauthorize and increase funding for the Women’s Business Center Program, which improves business training and counseling opportunities for women entrepreneurs.

Capital Formation Bills Pass in House. The House passed two bills earlier this week aimed at making raising capital just slightly easier for startups. H.R. 1525, the Disclosure Modernization and Simplification Act and H.R. 1839, the Reforming Access for Investments in Startup Enterprises Act, contain measures that simplify and codify some of the regulations that govern how growing private companies raise capital. It’s encouraging to see members of Congress seek out ways to support capital formation for our country’s emerging companies and we hope our senators follow suit.

Marco Rubio Addresses Tech in NYC. Civic Hall hosted Senator Marco Rubio this week to talk about the on-demand economy. He spoke to the advantages of working for on-demand services, (flexibility of hours, mobility of work,) and recognized the need for a middle ground status between W-2 employees and independent contractors. He also called out incumbents, such as the taxi and hotel industries, for hindering innovation. It is the role of the government, Rubio said, to help those displaced by the new economy access the new economy through education and other opportunities.

Regulating Drones. As the popularity and pervasiveness of drones, (or unmanned aerial systems, UAS,) increases, lawmakers are grappling with the best way to ensure safety and privacy without needlessly inhibiting innovation in this growing industry. On Wednesday, Representative John Garamendi (D-CA) and Senator Barbara Boxer (D-CA) introduced the SAFE DRONE Act of 2015, which prohibits drone flights within two miles of an airport or active fire. While some argue these sorts of rules should be left to the Federal Aviation Administration to craft, others are growing tired of waiting on the agency to act after it missed a Sep. 30 deadline to implement drone rules.

Startup News Digest 10/2/15

Our weekly take on some of the biggest stories in startup and tech policy.

Rise of the Rest Tour. Engine spent the week traveling with Steve Case on the Rise of the Rest road trip to celebrate entrepreneurship, in all its forms, across America. Check out our posts on our visits to Baltimore, Philadelphia, and Buffalo.

#Visagate2015. An unexpected, last-minute policy change by the Department of State blindsided thousands of highly skilled immigrants seeking green cards, leaving them ineligible to apply and frustrated by yet another delay in the unreasonably tedious application process towards permanent residence. So frustrated, in fact, that a number of them have sued the State Department. This is not the first time immigrants have had their green card hopes dashed by an agency about-face—there was a similar fiasco in July 2007.  And as Emma writes, this represents “yet another indication of how our broken immigration system is plaguing the entrepreneurial ecosystem.”

A Fireside Chat with CTO Megan Smith. On Thursday night, U.S. Chief Technology Officer Megan Smith sat down with Khan Academy founder Salman Khan at the Nourse Theater in San Francisco to talk about the intersection of technology and public policy. As a former Google executive and the founder of her own media company, Megan Smith has a unique understanding of how bringing TQ (or “technology intelligence,” as she has termed it) to the public sector can help build a better government. She touched on a number of issues, including the importance of connectivity, STEM education and even prison reform. We took special note when she called on the audience to work together to improve diversity in tech. “We should be bringing our neighbors’ kids to work,” she said, arguing that diversity should be in the top three priorities at a company, rather than the top 20.

Bringing the ‘Techies’ to Congress. CTO Megan Smith also touched on the need for the “techies in Silicon Valley” to do a “tour of duty” in the government. A new initiative led by the Open Technology Institute hopes to facilitate just that. Beginning in 2016, the Congressional Innovation Fellowship program will place technologists in Hill offices to help “inject greater technical expertise into the policymaking process.” This program represents just another way in which the federal government is trying to bridge the gap with tech and prove that policymakers can be innovators too.

T-Mobile Plans to Buy Enough Spectrum to Cover Entire U.S. T-Mobile CFO Braxton Carter reiterated some good news on Thursday—the company is aiming to purchase enough spectrum in next year’s incentive auction to cover the the entire U.S. We’ve talked before about why competition in the wireless market matters to startups, and we even wrote a letter to the FCC earlier this year advocating for safeguards that would improve the ability of competitive bidders like T-Mobile to play in this historic auction. With Sprint’s announcement last weekend that it plans to sit out the upcoming auction, we are thrilled that T-Mobile is still planning for robust participation.

The Federal Government Wants in on Crowdsourcing. In an op-ed published in Wired earlier this week, Senator Chris Coons (D-DE) revealed the Crowdsourcing and Citizen Science Act, which would give federal agencies the explicit authority to use crowdsourcing. According to Coons, the federal government is not prohibited from collaborating with the public to solve problems, but a lack of explicit authorization deters many agencies from taking full advantage of this option. He notes that “many of our nation’s challenging problems and questions can most effectively be solved and answered with the public’s help if they are given the chance.” We couldn’t agree more, and are happy to see legislation that would encourage these sorts of creative and inclusive approaches to policymaking.

Michael Petricone has “the best job in DC.” A Morning Consult write-up gave Engine Board Member and CEA’s SVP of Government Affairs, Michael Petricone, some much deserved recognition for his efforts to get Washington and tech companies on the same page. It’s a tough job, but somebody’s got to do it! And nobody tells tech’s story better than Michael.

Visagate 2015 - The Latest Example of America's Failed Immigration System

Today, thousands of foreign nationals who have been waiting for years to apply for green cards will finally be able to do so. However, a last-minute policy change by the Department of State last week rendered a large portion of these immigrants ineligible to apply—pulling the rug out from under them and forcing them to wait even longer before they can take the final steps towards becoming a permanent resident.

We all know our immigration system is broken. It is so backwards that hard-working, high-skilled foreign nationals who are in the U.S. on temporary visas have to file a petition just so they can hold their place in line to later submit another application for permanent residence. Sound complicated? It is. If you want to see for yourself, you can read the U.S. Citizenship and Immigration Service’s process for “adjustment of status” here (but unless your idea of fun is a trip to the DMV, you should probably skip it).

This insane bureaucracy is partly a result of the outdated Immigration Act, which placed limits on the number of visas and green cards that can be issued each year. The law was passed in 1990, long before anyone could have predicted the technological boom of the last 25 years or the resulting need for high-skilled employees. Today, demand far exceeds supply for both temporary visas and green cards. This has led to huge backlogs that force millions of immigrants, many of whom are already living and working in the U.S., to wait in line for years for a green card (in some cases, upwards of 20 years). During this wait time it is difficult, if not impossible, to switch jobs, start your own company, or even go back to school.

Since the number of available green cards is limited, each month the Department of State publishes a bulletin that outlines who can apply for one. Eligibility is determined by the date on which an immigrant filed their initial petition—basically, if you filed before the date listed in the bulletin, your time on the wait list is up and you can finally submit your green card application.

Last Friday, the Department of State published a revised visa bulletin for October that pushed up the eligibility cutoff dates—in some cases by more than two years. In other words, thousands of foreign nationals who thought they would be eligible to apply for green cards on October 1st found out just five days before the filing deadline that they will have to continue to wait.

This back-track by the Department of State is hugely frustrating for these individuals and their sponsoring employers, and is yet another indication of how our broken immigration system is plaguing the entrepreneurial ecosystem. Outdated, unreasonable limits on green card availability exacerbate the national talent shortage and threaten innovation and startup growth.

Legislators can fix this, and in fact, some have tried. Congress had the chance in 2013 when the Senate passed a comprehensive bipartisan reform bill, but efforts were stalled by partisan bickering and bogged down in election-year politics. However, there may be an opportunity to revive immigration reform through a somewhat unexpected channel—Speaker Boehner’s departure from House Leadership.

As the New York Times Editorial Board wrote last week, Mr. Boehner’s surprising retirement means he’s no longer beholden to the internal party politics that stymied any attempts to work on large-scale immigration reform legislation. While the prospects for sensible immigration reform remain a long shot as the 2016 election approaches, those of us that care about fixing our broken immigration system should seize any opportunity to push for legislators to take up the issue. Until Congress passes meaningful reform, talent-starved startups will continue to suffer while the brightest and best foreign nationals have their hopes of permanent residence dashed and delayed by a broken system.

Startup News Digest 9/25/15

Our weekly take on some of the biggest stories in startup and tech policy:

Startups Defend Net Neutrality Order. The FCC is facing ongoing litigation in the DC Circuit Court of Appeals over the net neutrality rules it passed earlier this year, and on Monday, the court received briefs from a variety of companies and organizations supporting the FCC’s rules. Engine filed a brief along with a group of innovative startups that included Dwolla, Fandor, Foursquare, General Assembly, GitHub, Imgur, Keen IO, Mapbox, and Shapeways. We argue that the FCC’s decision to reclassify broadband as a telecommunications service was necessary to preserve the continued growth of the startup sector, which has in turn driven consumer demand for broadband and incentivized companies to invest in their networks. The court will hear oral arguments in the case on December 4 and will likely render its decision sometime next year.

SEC To Finalize Crowdfunding Rules. Sources at the Securities and Exchange Commission have told Politico the agency is likely to finalize long-awaited crowdfunding rules in late October or early November. SEC rulemaking will put Title III of the JOBS Act into effect, which could radically expand capital access for startups—though the statute does contain some burdensome requirements for companies. While the startup community will be excited to see any action from the SEC in light of an extended delay, we need to ensure that whatever regulatory regime the SEC adopts is well-calibrated and accessible to the small, emerging companies that could most benefit from new sources of capital.

Bush Campaigns Against Open Internet. Most of the Republican candidates in the 2016 presidential race have come to realize that an overwhelming majority of the public supports net neutrality rules (including 81% of Republicans) and have refrained from loudly criticising the FCC’s Open Internet Order. But this week, Former Governor Jeb Bush expressed his opposition to net neutrality (a policy he onced called “one of the craziest ideas [he’s] ever heard”), arguing that preventing ISPs from abusing their gatekeeper power does nothing to enhance consumer welfare. Bush’s comments run counter to both the FCC and the conservative DC Circuit Court of Appeals, which have recognized that net neutrality rules and foster the growth of the edge providers and promotes investment in broadband networks, resulting in better and more affordable service for consumers. It’s a reminder that startups, consumers, and everyone else who benefits from the open Internet should keep a close eye on this presidential race. 

Administration Taking Steps to Promote High-Speed Broadband Access. On Monday, the Broadband Opportunity Council published its first report, which includes 36 actions that federal agencies will take to encourage broadband deployment.  These actions require no new funding, “but existing sources of funding are being opened up and barriers to deployment are being brought down.”  Of particular note is that the White House refers to broadband as a “core utility,” like electricity or water. We tend to agree - broadband is no longer a luxury. Connectivity is core to innovation and the ability of startups to reach customers and scale, and we are pleased to see the Administration taking these steps to bring access to underserved populations and areas of the country.  

White House Considers Encryption. Thanks to some leaked documents from the White House, it’s rumored that President Obama may come out in opposition to a law that would require firms be able to unlock their customer’s encrypted smartphones and applications. Up to this point, law enforcement has argued the need for backdoors to encryption to ensure national security and safety. This sort of advocacy from the White House would help repair global trust in the US government, countering the narrative in Europe that the US is trying to expand its surveillance activities. Meanwhile, the American Civil Liberties Union (ACLU) and other privacy advocates continue to push the importance of US government’s use of encryption to promote both personal privacy and national security.

“Facebook giveth and Facebook taketh away.”  The Wall Street Journal reported this week that dozens of startups have “shut down, been acquired or overhauled their business” as a result of Facebook’s new policies limiting outsider access to some of its users’ date. Facebook’s rules, which went into place in May, restrict what data can be used by third parties like startups, academics, politicians or organizations.  Other social media giants like LinkedIn and Twitter have enacted similar policies, signaling to the startup world that if you are building a product or service that relies on data from social media sites, that data may not always be available...

ECJ Advisor Deals Blow to U.S. Tech Companies.  In other data related news, a European Court of Justice (ECJ) advisor issued an opinion this week that the “safe harbour” agreement allowing for data transfers between the EU and the U.S. is “invalid” due to growing concerns around U.S. surveillance practices.  While the lawyer’s opinion is not legally binding, if cemented by a formal ruling it would create a headache for U.S. tech companies who could face data localization requirements in any EU countries.

Women Tech Leaders. Fortune profiles some of the powerful female talent Google has been able to attract at the executive level, including Ruth Porat, a recent addition who has led the transition from Google to Alphabet. Many of these executives after building their experience at Google have left to grow smaller tech companies. Meanwhile, Mary Lou Jepsen of Facebook has a different take: she sees many senior women leaving because they feel isolated by the tech industry.

Startup News Digest 9/18/15

Our weekly take on some of the biggest stories in startup and tech policy.

Tech and 2016. In case you missed it, check out Julie talking about tech and the 2016 election on KCRW’s Press Play with Madeleine Brand.

FCC Opens Up Business Broadband Data to New Eyes. On Thursday, the Federal Communications Commission (FCC) announced that it will release data on the little-understood special access market. While most consumers have never heard of special access lines, you probably unknowingly use them every day. They are the high capacity business broadband lines that allow ATMs to connect directly to your bank or cell phone towers to connect back to the network. Competition in this industry is sorely lacking, with just two providers covering most of the U.S. and jacking up prices for the startups, universities, hospitals, and other businesses that use them. While the data will only be accessible to analysts approved by the FCC, its release represents a step in the right direction towards more transparency, increased competition, and lower broadband prices.

Senate Committee Considers ECPA Updates. The Senate Judiciary Committee held a hearing on reforming the Electronic Communications Privacy Act (ECPA) on Wednesday morning. As we’ve covered in past digests, it's still legal for law enforcement to access your emails and other digital data without a warrant. Last week, the California legislature passed a bill to modernize these outdated digital privacy laws at the state level. Still, a federal overhaul of ECPA would be an even better fix, bringing these laws out of the digital dark ages.  Sens. Lee (R-UT) and Leahy (D-VT) have proposed a bill in the Senate, and there is similar legislation in the House. We’ll be tracking reform efforts.  

Dancing Baby Wins Victory For Copyright Fairness. The courts ruled this week in Lenz v. Universal, the famous “dancing baby” case. As Evan writes, “The Lenz ruling is important for a few reasons. First, it should make it much harder for content owners to abuse the takedown process. […] Second, the decision should serve as a loud reminder that the tech world needs to get to work rebalancing our copyright laws to ensure that they’re actually promoting creativity and expression.”  Read the whole post here.

$81M for CS in NYC. On Wednesday, New York City Mayor Bill de Blasio announced an $81 million public private partnership to make computer science education available to every student in city public schools by 2025. Substantial contributions have come from the Wilson family foundation, the AOL Charitable Foundation, and the Robin Hood Foundation. New York joins Chicago and San Francisco in terms of large cities that have made similar commitments, and we hope to see other cities, states, and the federal government continue to build on such efforts to prepare students for jobs in the growing innovation economy.

The Fight Is On Over Chicago’s Streaming Tax.  A group of Chicago residents have sued the city over its controversial application of the 9% Amusement Tax to online streaming services like Netflix, Hulu, and Spotify.  The Amusement Tax, which applies to events like concerts and sporting games, has been in existence for a while, but was only recently expanded to cover streaming services. And Chicagoans’ bills are already increasing.  As Ars Technica reports, one reader’s Spotify bill went from $7.99 to $8.71 this month. We’ll be watching, as the outcome of this case could have a national impact on the power of cities and states to tax the internet economy.

“Cool clock, Ahmed”. When a Texas middle-schooler’s homemade invention was mistaken for a bomb this week, prompting an outlandish response by his school and local law enforcement, it caught the tech world’s - and the President’s - attention. As a New Yorker writer points out, “His arrest comes at a moment when some of the world’s most influential people...have argued that there aren’t enough U.S. students gaining the math and science skills that will get them jobs in the tech sector."

A Different Kind of Tech Event. We were impressed and encouraged by the conversation at last week’s Tech Inclusion conference in San Francisco, which brought together leaders in Silicon Valley and the national tech community to discuss the challenge of making the tech industry more diverse. Read our take on why this wasn’t your typical tech event and what we took away.

Startup News Digest 9/11/15

Our weekly take on some of the biggest stories in startup and tech policy.

CalECPA Letter to Governor Brown Urgently Needs Your Signature. On Wednesday, the California Assembly passed the California Electronic Communications Privacy Act (CalECPA) with broad, bipartisan support. The bill (which we covered in last week’s digest) would update digital privacy laws by requiring law enforcement to obtain a warrant before accessing an individual’s electronic communications. The bill now heads to Governor Jerry Brown for signature, but opponents are campaigning aggressively for a veto. We’re sending a letter to Governor Brown urging him to sign the bill and modernize an absurdly outdated privacy law. If you are a startup and would like to lend your voice to this fight, please fill out this form by noon on Monday, September 14.

Upcoming Tech Events. Catch our webinar on September 23, “How can startups work with government to promote innovation and new technologies?” Co-sponsored with Gide Public Affairs and ConnecTech, the webinar will look at how to incorporate a government relations strategy and leverage government resources to grow your startup, and how we can all advocate to protect the startup community. Click here to RSVP.

Intelligence Reauthorization Bill Still Held Up Over Terrorist Reporting Provision. As Congress returns to session, a bill to reauthorize funding for intelligence agencies continues to be held up in the U.S. Senate over a provision that would require social media and internet companies to police the speech of their users and report apparent “terrorist activity.” Opponents argue that the bill’s vague legislative language will result in a compliance nightmare for the wide range of companies that will be subject to the bill’s requirements.  Senator Ron Wyden (R-OR) has vowed to block the bill until these concerns are addressed.  We will be monitoring closely, as the currently ill-defined requirements could be overly burdensome and difficult to navigate for many startups.  

An Immigrant Entrepreneur’s Story. "Our immigration system hinders entrepreneurship, innovation and productivity," writes tech entrepreneur, Amit Paka, and we couldn't agree more. Paka shares his story of patiently navigating the irrationally complex immigration system to at long last obtain residency status and become a U.S. citizen. And in that time he also founded two companies, despite significant obstacles. This broken system impedes opportunities for entrepreneurs - the men and women creating new technologies and jobs in this country every day - yet it remains to be seen whether real solutions are in sight.

Patent Reform. Lot’s of news on patents this week. House Judiciary Chairman Bob Goodlatte expressed confidence that patent reform legislation would get a vote in the weeks ahead. The NY Times wrote in an editorial that “patent law should not be used to prevent consumers from reselling, altering or fixing technology products.” And the patent research platform Patexia launched a new initiative using crowdsourcing to help companies share some of the burdens associated with patent litigation. In case you missed it, check out our recent post on the status of patent reform efforts in Congress.

A Safety Net for the On-Demand Economy.  As lawmakers continue to grapple with the gig economy’s dramatic transformation of the American workforce, recommendations are emerging around which policies will best serve the growing class of on-demand workers. On Wednesday, the National Employment Law Project published a report calling on lawmakers to classify on-demand workers as employees and extend a number of protections and benefits to them. Freelancers Union founder Sara Horowitz proposed additional solutions in a New York Times op-ed published Wednesday, arguing for the creation of a “new system of portable benefits” to better provide a safety net for workers in the freelance economy. These are important conversations for the startup community to take part in as the debate continues around how to best support this new class of workers.

Diversity in Tech. African Americans face serious challenges in entering the tech field, even if they live just miles from Silicon Valley. Profiling several new organizations including the Hidden Genius Project, based in Oakland, the New York Times highlights how the tech community’s debates about its lack of diversity have spurred initiatives to educate, train and support underrepresented minorities to enter into and succeed in the industry. African Americans have become an especially important focus: they currently make up only 7 percent of the tech workforce and receive only 1 percent of VC funding. See more on Engine’s work to diversify tech here.

Tech Leaders in Politico 50. The Politico 50 is out, recognizing some of the people transforming American politics this year. The list includes a number of tech leaders, including Engine board member Marvin Ammori, along with Susan Crawford, Tim Wu, Michelle Lee and Chris Soghoian. Congrats to everyone who made the list!

Startup News Digest 9/4/15

Our weekly take on some of the biggest stories in startup and tech policy:

Growing Support for CalECPA.  Right now it's still legal for law enforcement to access your emails and other digital data without a warrant. SB 178, the California Electronic Communications Privacy Act (“CalECPA”), would change that on the state level by modernizing outdated digital privacy laws. The bill passed the California Senate back in June, but still faces a couple of hurdles, including a vote in the Assembly that should take place in the next couple of weeks.  The LA Times just endorsed SB 178, noting that “Californians need the protections offered by SB 178, and the bill deserves the Legislature's support.”  A poll published this week found similar support among California voters, with 82% of participants agreeing that law enforcement should get a warrant before accessing an individual’s digital data.  Engine echoes this endorsement of SB 178 and hopes to see California take the lead on updating its privacy laws to keep pace with the changing digital landscape.

The Future of Higher Education. Daniel Pianko of University Ventures writing in TechCrunch argues that the lack of innovation in higher education is due to a lack of commitment from Silicon Valley billionaires. “Today’s current generation of entrepreneurs are spending their energy and resources lobbying for band-aid solutions like H-1B visas, when they could be reimagining the current pipeline to address the lack of female and minority engineers in their companies.” Pianko points out that it was investment from 20th century titans of industry like Johns Hopkins and Andrew Carnegie that created the modern research university, and forced schools like Harvard and Yale to evolve in order to compete. He also points to non-traditional education models being pioneered at places like Galvanize. Here’s a look back at a deep dive we did on education policy and its impact on innovation.

New White House Hire. The White House announced that they are hiring their first Director of Product this week. Josh Miller, a startup founder who sold his company to Facebook last year will lead efforts to improve their existing digital products and look to develop new ones. Miller has a history of bringing a tech perspective to civic engagement. This marks yet another move from an administration that seems determined to engage with startups to improve the way government functions.  

Diversity in Tech. Troubling new data from the Pew Research Center shows that “businesses owned by women and minorities bring in far less revenue than firms with male or non-minority owners.” The research finds that even when you look at sectors where women tend to fare better, the problem persists. This Fortune article hypothesizes that one big factor may be a lack of investors--a problem that has been documented before. Engine will continue to work on access to capital issues, particularly as it affects founders from underrepresented groups. Stay tuned for more on that in September….  

Drones. The National Journal reports that in the absence of federal regulations, 26 states have now passed local legislation to limit the operation of drones. This patchworks of regulation is causing concerns for operators and commercial users. Hopefully the months ahead will see a thoughtful approach to protecting safety and privacy that doesn’t needlessly throttle innovation in this growing industry.

Car Hacking. The debate over how to make Internet-connected vehicles more resistant to cyber attacks is heating up in Washington. Much of the discussion will center around whether these are problems that can be solved within the industry, or if government action will be necessary to spur automakers to act.

Startup News Digest 8/21/15

Welcome to the Startup News Digest, our weekly take on some of the biggest stories in startup and tech policy. Here's what we've been tracking the week ending August 21st, 2015:

• Venue Reform. 44.4% of all patent cases are filed in the Eastern District of Texas. And that’s no accident. Our friends at EFF took a close look at the numbers, and found that the “probability is so vanishingly small that you’d be more likely to win the Powerball jackpot 200 times in a row”. So why are so many cases filed there? Because the Eastern District is notoriously friendly to plaintiffs, making this an ideal location for patent trolls to operate. More on the numbers, and the need for venue reform, here. And read our recent take on the problem here.

• Copyright Law and Creativity. Copyright law's principal purpose is to encourage creativity: giving creators exclusive control over their content, the argument goes, will allow them to earn enough money to sustain further creativity. The trajectory of copyright policy in the past few decades seems to operate on the reductio ad absurdum that if exclusive control over content leads to more creativity, maximum control must lead to maximum creativity. It is no surprise, then, that content industries reacted so strongly to digital technologies that could weaken control over the distribution of their work, arguing that the Internet will ultimately destroy creative industries. But, as the New York Times highlights, this argument doesn't hold up all that well in practice. On the contrary, creative production has exploded with the rise of digital distribution technologies. The findings should give policymakers pause about further ratcheting up copyright protections like term lengths and infringement penalties that already likely diminish rather than promote creativity. We wrote more about the negative impact of punitive copyright law here.

• Diversity in Tech. The Verge took a close look at the diversity numbers at some of the largest tech companies.  And while the numbers aren’t good, they also point to some of the problems with the ways employment data gets reported to the federal government. If we’re going to make progress in diversifying the tech sector, we need data that accurately reflects the problem and the way it responds to various efforts from both the private and public sector. Check out some of Engine’s work on diversifying tech here.

• Taxing the Digital Economy. The Wall Street Journal looks at ways different states are trying to collect taxes from new technologies to offset losses in sales tax and other traditional sources of revenue. While states are reasonable to want to collect funds they are due, this kind of piecemeal approach creates serious regulatory issues for startups that operate nationally or globally. And it has the potential to push entrepreneurs out of states with particularly onerous policies. More here on the dangers of trying to apply old tax and regulatory schema to new technologies.

• Drones. As drones (or unmanned aerial vehicles, UAVs) go mainstream, and some disrupt air traffic, policymakers are looking to apply rules that would limit their ability to cause danger or invade privacy. Sen. Chuck Schumer (NY) is pushing to require dronemakers to develop technology that would keep drones from entering restricted airspace. This sort of geo-fencing provision will likely find its way into negotiations over the extension of the FAA reauthorization bill next month. Meanwhile, researchers at UC Berkeley are testing a license plate for drones consisting of multicolored lights on the bottom of an aircraft. The unique pattern of blinks assigned to each drone could be identified in a database by law enforcement.

• Decoding the On-Demand Economy. Policymakers (and presidential candidates, too) are grappling with how to interpret the emerging on-demand economy and too often, as Devin Findler of Institute for the Future points out, this industry is wholly categorized as either good or bad. The conversation among regulators, policymakers and even media critics should instead seek to understand the underlying technologies transforming sectors of our economy and how new platforms built on top of those technologies can be "intentionally designed to maximize the benefits for everyone connected to them." IFTF recently sat down with the Department of Labor to share these more nuanced insights about the future of work - we need more of these conversations happening at every level of government.

VET Act: Turning GI Benefits into Startup Funding

Many Americans think of GI benefits as applying only to secondary education. But that’s a fairly narrow interpretation of a bill that originally set out to provide broader assistance for those transitioning from the military to civilian life.

In 1945, when the GI Bill (then called the Servicemen's Readjustment Act) was first passed, it provided low-interest loans to start a business, low-cost mortgages, tuition and living expenses to attend higher education. The Bill made not just college, but also business and home ownership possible for millions – opportunities that were previously seen as unattainable by the average American.

In 2015, GI benefits primarily emphasize education, providing about $20,000 per year (for three years), plus a stipend, to attend a university program. As Todd Connor of Bunker Labs (a network of veteran business incubators) explained in his recent blog post, this assumes that further education is what every veteran needs to become gainfully employed and reach their career goals. However, not all veterans demand nor need a secondary degree -- for many, employment and personal goals are better achieved by launching a startup or traditional small business. In a study conducted by Bunker Labs, 90 percent of veterans said they would like to use their benefits towards starting a business.

One way to make that dream a reality for more of our veterans is through the Veterans Entrepreneurial Transition Act of 2015, legislation co-sponsored by Senators Moran and Tester that was recently passed out of the Small Business and Entrepreneurship Committee. The VET Act would set up a pilot program to evaluate and fund proposals by veteran entrepreneurs, allowing them to use their $20,000+ per year towards starting (or acquiring) their own business. This would include “purchasing goods or services necessary for the creation or operation of a qualifying business enterprise.”  The pilot would even allow veterans to apply as a group and pool their benefits.

Our military is made up of diverse individuals who are hard working, strategic thinkers, and fast learners. We’re missing a great opportunity by not helping more of them become the next generation of innovators and entrepreneurs. We support the efforts of Senators Moran and Tester and urge the Senate and House to pass this important piece of legislation.

Bring Us Your Innovators: New entrepreneurial visa legislation aims to bring jobs, investment to America

Last week U.S. Reps. Zoe Lofgren (D-CA-19) and Luis Gutierrez (D-IL-4) introduced the EB-Jobs Act of 2015. The bill is meant to augment the present EB-5 immigrant investor program, providing additional visa opportunities for qualified immigrants who are not currently eligible for visas. This bill would create  a ‘startup visa’- a new green card category for entrepreneurs who establish businesses and create jobs. While the ‘startup visa’ is certainly a positive for entrepreneurs, it’s not the first time such legislation has been introduced, highlighting the need, but also difficulty of passing similar legislation.

This new bill is important for two main reasons; it highlights deficiencies in immigration avenues for entrepreneurs, and also recognizes the unique role the startup community plays in economic development and job creation. Currently, entrepreneurs and founders seeking to start a business in the US have limited options. The existing EB-5 program provides green cards to individuals who invest in a new commercial enterprise of between $500,000-$1 million (depending on the particular project area). Alternatively, high skilled individuals can enter the H-1B visa lottery, though as we noted in April it’s woefully oversubscribed.  This spring saw 233,000 applicants for 85,000 spots-  and only for individuals with a sponsoring employer. Lacking significant personal wealth or an existing employer willing to sponsor a visa, foreign entrepreneurs have no pathway to legal residency.

The EB-Jobs Act would change this landscape, allowing immigrants with a clear business plan and outside venture backing into the US on a green card. As written, the bill would provide residency to individuals who have either secured outside venture capital, are accepted into an accredited accelerator program, or have recently started a company that employs American workers. As Rep. Lofgren noted in announcing the bill, immigrants have created “nearly half of America’s top venture-backed companies and those companies in turn have created an average of 150 jobs each.” Research backs up the impact of immigrants on the startup economy: according to a recent report from the Kauffman Foundation, immigrants are nearly twice as likely to be an entrepreneur compared to native born americans. The EB-5 visa would ensure promising individuals can continue to start their businesses in the US, instead of Canada, Ireland, or a host of other countries currently offering startup visas.

Since 2010, Congress and the White House have put forth similar proposals to address this need, though efforts have perennially stalled - most often due to contention around broader immigration reform. While the bill faces an uphill battle in Washington, it’s important for all parties to recognize its benefits and limitations. As Rep. Gutierrez stated upon its introduction, “this bill is intended to address just one aspect: making the U.S. economy more attractive to job-creators and entrepreneurs.” This bill alone will not address the multitude of immigration issues affecting the economy, though for a small, but important subset of entrepreneurs, the legislation offers a new path to the US. For that reason alone, the EB-Jobs Act is good for the startup ecosystem and the American economy.

Celebrating Inclusive Tech & White House Demo Day

Momentum behind improving the tech community’s diversity and inclusivity is stronger than ever. And it needs to be - the current numbers are striking:

• At seven Silicon Valley companies that have released staffing numbers, and average of just 2 percent of technology workers are black and just 3 percent are Hispanic.
• Women represent fewer than 13 percent of employed engineers and 3 percent of startups founders.

Though most companies admit to a diversity problem, the startups and entrepreneurs who are successfully creating an inclusive environment and combating stereotypes have gone largely unnoticed, and their best practices are not being widely replicated. The White House seized this moment to host its first ever Demo Day under the theme of inclusive entrepreneurship, showcasing a diverse set of 50 entrepreneurs. Attendees represented a range of technologies, from new kinds of search engines to apps that utilize military base information and startups improving foreign language education.

Additionally, many larger companies and organizations announced tangible commitments to develop a more diverse and inclusive workforce and talent pipeline. Highlights from the announcements can be found below. More details, including the companies and individuals involved, can be found in the official press release.

To continue this important conversation, Engine hosted a reception with CEA and Google following the White House events. It gave Demo Day attendees and supporters the chance to talk further about their work to diversify tech, and better understand what part everyone is playing. Attendees engaged in detailed conversations about the road to entrepreneurship, what it means to be a minority seeking funding, and, more generally, the policies that affect new, small businesses. In attendance, among others, were Demo Day honorees Pinterest, FoodTrace, and Millennial Trains Project.

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The Administration announcements:

• Announcing 116 winners of two Small Business Administration prizes that promise to unleash entrepreneurship in communities across the country: the Growth Accelerator Fund for startup accelerators, incubators, and other entrepreneurial ecosystems; and the President’s “Startup in a Day” initiative that will empower mayors to cut red tape for local entrepreneurs.
• Scaling up the National Science Foundation I-Corps program with eight new and expanded Federal agency partnerships, introducing hundreds of entrepreneurial scientist teams across the country to a rigorous process for moving their discoveries out of the lab and into the marketplace.

The independent commitments:

• Expanding the response to the President’s TechHire initiative with 10 new cities and states working with employer partners on new ways to recruit and place applicants based on their skills, create more accelerated tech training opportunities, and invest in innovative placement programs to connect trained workers with entrepreneurial opportunities and well-paying jobs.
• Over 40 leading venture capital firms with over $100 billion under management, including Andreessen Horowitz, Intel Capital, Kleiner Perkins Caufield Byers, and Scale Venture Partners, committing to specific actions that advance opportunities for women and underrepresented minorities in the entrepreneurial ecosystem.
• Institutional investors committing over $11 billion to emerging managers, including CalPERS and the New York City Pension Funds.
• Over 100 engineering deans committing to attract and retain a diverse student body, building the pipeline for the next generation of American engineers and entrepreneurs.
• Over a dozen major technology companies announcing new actions to ensure diverse recruitment and hiring, including Amazon, Box, Microsoft, Xerox, and others committing to adopt variations on the “Rooney Rule” to consider diverse candidates for senior executive positions.

A Local Approach to Enabling Entrepreneurs, Despite Visa Limitations

With little movement on meaningful immigration reform from the federal government, entrepreneurs in Massachusetts and now Colorado are pursuing a local approach to enabling foreign-born startup founders to launch and grow their businesses in the U.S.

Under the current immigration system, international students graduating from U.S. universities have a short runway to secure jobs from companies that will sponsor their visas in order to remain here to work. Even for those students talented enough to land great jobs at U.S. companies, the H-1B visas commonly reserved for tech workers are in extremely limited supply. And for those graduates, or even current H-1B visa holders, looking to launch their own ventures, acquiring and retaining the appropriate visa is nearly impossible. (Though it should be noted the President’s executive actions are attempting to make this process slightly easier.)

Last year, Jeff Bussgang from Flybridge Capital Partners worked with former Massachusetts governor Deval Patrick and the Massachusetts Technology Collaborative to imagine and establish a new way for non-citizen students to jumpstart the H-1B visa application process so they can start businesses in the U.S.

The Global Entrepreneur in Residence Program partners with universities to select a group of “entrepreneurs in residence”, similar to the temporary entrepreneur mentors at many businesses and venture capital firms. Instead, however, these entrepreneurs are employees of a university that sponsors their visas.  As academic institutions, universities are not subject to the same H-1B visa caps as traditional employers. The entrepreneurs are expected to dedicate several hours a week to being a resource and mentor at the university while the rest of their time can be devoted to their startup. It’s a creative, thoughtful solution to an extremely outdated immigration system holding back too many promising entrepreneurs in this country.

The University of Massachusetts Boston and University of Massachusetts Lowell piloted the program last year. As a result, Harvard Business School graduate Vivek Gupta was able to keep his financial services technology startup, Wealthvine, in the U.S, and his fellow alumnus Bryan O’Connell was able to build his healthtech company here too. Massachusetts’s current governor, Charlie Baker, recently allocated $100,000 in funding to continue the program this year.

The initiative has also now expanded to other parts of the country. Brad Feld of the Foundry Group and the University of Colorado Boulder are together funding at least four experienced and emerging entrepreneurs through the program this fall. The selected entrepreneurs will be expected to work for up to 20 hours a week on campus.

The program benefits both entrepreneurs and the university. “The EIR program will bring outside talent to campus to mentor students engaged in a range of projects requiring an entrepreneurial mindset,” explained Phil Weiser, dean of the University of Colorado Law School and executive director and founder of Silicon Flatirons—the university’s law, technology and entrepreneurship center.

“While I’m not giving up on a federal solution, I plan to put my money and my energy into a state level solution,” Brad remarked in a blog post, touching on what’s so refreshing and inspiring about this initiative: it’s a local, collaborative solution to what’s become a massive challenge to overcome at the federal level.

Only Congress has the power to solve the issue at scale by revisiting our outdated visa system and establishing a true entrepreneur’s visa like those in Chile, Canada and the UK. In the meantime however, communities and universities with an interest in retaining the bright students already in their schools or attracting and supporting new global talent now have an alternative approach at their disposal. The Global Entrepreneur in Residence Coalition serves as a sort of open-source toolkit for other cities, states and universities to explore launching similar programs.

“Our hope is that by publishing the program's playbook, we can encourage other states to implement the program as well,” wrote Jeff on his blog.  Any state looking to support entrepreneurship would do well to follow the lead of Massachusetts and Colorado.

Statement on Expanded Employment Authorization for Spouses of Highly Skilled Workers

 

UPDATE - May 26, 2015:

 

Today, U.S. Citizen and Immigration Services (USCIS) began accepting work authorization applications for work for H-4 dependent spouses. The implementation of this program is an important step in modernizing our immigration system and bolstering our workforce. Allowing the spouses of immigrants to work provides greater economic stability and a better quality of life to many immigrant families around the country. And it's a win for startups and other businesses that will now have access to a wider pool of global talent already here in the U.S.

 

 

Statement by Engine Policy Director Evan Engstrom

Re: DHS Expanding Employment Authorization for Some Spouses of Highly Skilled Workers

 

Today's DHS announcement is a hard fought win for thousands of immigrant families, providing more stability and certainty for those who want to come and stay in the United States. It's also a win for U.S. startups, removing yet another major obstacle to attracting and retaining top talent from around the world, and adding even more workers to the talent pool. While we still await Congressional action to expand the supply of visas available to high skilled workers, the H-4 rule solves a significant problem with our nation's broken immigration system. We're grateful to the White House, DHS, USCIS, and the many startups, workers, and advocates who have been leading the charge for true immigration reform. We look forward to seeing more of the President's directives become reality in the coming months, including improving visa options for immigrant entrepreneurs who start companies and create jobs in the U.S.

 

 

 

An Outdated Visa System Leaves the Future of Innovation to Chance

Today U.S. Citizenship and Immigration Services (USCIS) will begin accepting applications from companies for H-1B visas - the primary work authorization program for foreign high-skilled employees, including those with expertise in science, engineering, and computer programming. These are workers that our economy depends on to power the country’s top technology firms as well as young and growing technology startups.

Yet despite an exponential increase in global demand for talented workers, the visa pool remains capped at 85,000, an arbitrary and outdated number set by Congress decades ago. USCIS already announced it expects the cap to be met within 5 days, meaning visa applications for high-skilled engineers, computer scientists and developers will be subject to random lottery. The futures of the very brightest men and women among these workers will be left to chance, while companies will again be forced to limit their workforces here in the US.

For all those who care about the future of our economy, April 1 is an opportunity to remind Congress that this woefully outdated immigration system is hindering the growth of high-tech companies across this country and the good jobs they create. Serious reform is long overdue, and it becomes more urgent with each passing year as we turn away more and more skilled, in-demand workers vital to both new startups and established companies.

Immigration reform must include raising the cap on H-1Bs and expanding the scope of other types of visas many companies rely on to hire talented workers. But a full modernization of the immigration system must also incorporate new pathways for both work authorization and citizenship for high-skilled foreign entrepreneurs seeking to build new companies here. Because it’s not just about allowing high-tech companies to hire educated employees to fill existing jobs; our economy also needs ambitious entrepreneurs to create new jobs, as well as new technologies that will continue to make America the world leader in innovation. Talent can be born anywhere, and an immigration system that welcomes and encourages entrepreneurship will make sure that these talented individuals can flourish here in the U.S.

While the President’s executive action addresses some of the shortcoming of our immigration system and aims to create visa pathways to allow entrepreneurs to build businesses in America, a truly modernized, updated and viable system can only come through Congressional reform. If we are to remain at the forefront of innovation, we must do everything in our power to bring the most talented innovators to the U.S.

Unless Congress acts to expand the pool of visas available for these innovators and make it easier for foreign entrepreneurs to create businesses and jobs in the U.S., we risk forfeiting our status as the leader of the technology world.

Tech in New York - Governor Cuomo’s 2015 Opportunity Agenda

With Engine having recently expanded to New York, we’re paying closer attention than ever to the decisions being made in Albany and their impact on the state’s tech sector. New York is home to one of the largest and most rapidly expanding startup communities in the country, so local and state level policies on investment and regulation have implications for the future of tech in all fifty states. This afternoon, Governor Cuomo laid out his vision for 2015 in a combined State of the State and budget address, along with a 500-page policy book that included additional proposals and details. While the presentation covered a wide range of topics from criminal justice to transportation infrastructure, the Governor did include several initiatives of particular interest to the startup community in both the education and economic development sections of his speech. For example, the Governor discussed his recently announced New NY Broadband Program, which would provide matching funds for internet service providers that invest in high-speed broadband in underserved areas. Access to broadband is essential not just for consumers, but for growing and potential startup communities as well. By using state funds to leverage private investments, this program could go a long way towards supporting innovation around the state. At the same time, the Governor avoided mention of the proposed merger of Comcast and Time Warner Cable, which would do much to undermine efforts to improve broadband access here in New York and around the country. Giving Comcast that kind of monopolistic control over broadband would remove almost any incentive for them to provide the higher internet speeds necessary for startups to thrive, and for us to remain competitive with other countries. Governor Cuomo has previously indicated his concerns about the proposed merger, and the state’s Public Service Commission is currently reviewing the deal to determine if it would benefit or harm New Yorkers. We urge the Governor and the PSC to oppose this deal, and continue to champion high-speed access for all New Yorkers. The Governor also talked about expanding a number of programs that would provide startups with access to capital, technical support, and other incentives. One proposal particularly worth noting is doubling the NY State Innovation Venture Capital Fund from $50 million to $100 million. The Fund is overseen by Empire State Development, and provides two types of investments: small pre-seed stage investments of up to $100,000 to startups associated with universities in state; and investments of up to $5 million in businesses in strategic tech industries. This additional capital, and the private investment it can leverage, could make a big difference for some startups that would otherwise have trouble accessing funding. And the state can do even more to help New York startups access capital. In his campaign policy book released in October, Governor Cuomo declared his support for equity crowdfunding, which provides financing opportunity for businesses that have a hard time attracting traditional venture capital. Crowdfunding has proven to be especially beneficial to women and minority owned startups. And while the real solution is federal authorization of equity crowdfunding, New York could join more than a dozen other states that have already authorizing intrastate crowdfunding. This would not only provide greater opportunities for diverse startups in Queens or Albany or Rochester, it would help build momentum towards federal action. We hope to see more support from the Governor on this subject in the months ahead. The Governor also discussed a package of proposals to improve higher education in ways that would better prepare students for tech jobs and help startups access the talent they need in order to grow. He talked about creating partnerships between community colleges and employers, and rewarding schools who use those partnerships to provide students with real-world job skills. He proposed an Employee Training Incentive Program that would provide tax incentives for companies that provide on-the-job training. And perhaps most exciting, Governor Cuomo proposed changes that would streamline approval of new programs and degrees both at higher education institutions and high-quality proprietary schools. Recognizing that the skills many new employers need change on a yearly or even monthly basis, he said that “it can no longer take two years for a new degree or training program to be approved.” With startups in constant need of new talent, we welcome the Governor’s commitment to providing students in New York relevant skills. And since startups account for all net new job growth in the United States, making sure those jobs go to New Yorkers is good local economic policy. As more decisions around the details and implementation of these proposals get made, we’ll be working to ensure that startups play a meaningful part in the conversation. And we’ll continue looking for other ways policy makers here in New York can support innovation throughout the state.

Bipartisan Senate Bills Propose Critical Reforms for the Tech Community

We’ve said it before and we’ll say it again: many of the greatest obstacles to attracting and retaining tech talent are the result of our country’s broken immigration system. There’s a pressing need for substantial legislative reforms that reach beyond the President’s recent executive actions. So we’re happy to see the new Congress hit the ground running with two high-skilled immigration bills—the Startup and the Immigration Innovation (“I-Squared”) Act, both bipartisan efforts introduced in the Senate this week. These important pieces of legislation propose a number of critical reforms to our immigration system, including increasing the pool of visas available to the high-skilled talent our technology and startup communities desperately need.

The bills vary in their approach, but cover similar ground. On Tuesday, Senators Orrin Hatch (R-Utah), Amy Klobuchar (D-Minn.), Marco Rubio (R-Fla.), Chris Coons (D-Del.), Jeff Flake (R-Ariz.), and Richard Blumenthal (D-Conn.) re-introduced the Immigration Innovation Act, (also known as the “I-Squared” Act). The bill would increase the H-1B cap from 65,000 to 115,000 visas, expand worker mobility for visa-holders in-between jobs, and create a number of important exemptions from the Green Card cap for professionals in STEM fields.

The Startup Act, originally introduced in February 2013 (you can read what we wrote then here), was re-introduced today by Senators Mark Warner (D-Va.) and Tim Kaine (D-VA) along with Sens. Jerry Moran (R-KS) Chris Coons (D-DE), Roy Blunt (R-MO) and Amy Klobuchar (D-MN). Their bill tackles many of the same issues with visa limitations, and goes farther in establishing an Entrepreneur’s Visa to allow founders of new businesses to remain in the United States, launch businesses, and create jobs.

Providing a pathway for entrepreneurs to create businesses in the U.S. is particularly important. Under current employment-based visa provisions, it is exceedingly difficult for entrepreneurs to venture out on their own and create startups which will in turn create new jobs here in the U.S. Immigrants are twice as likely to start businesses as their native-born peers, and failing to provide an easy way for foreign entrepreneurs to start their businesses here is essentially the same thing as shipping jobs overseas.

While both bills are likely to face some real challenges in Congress, the need to make our immigration system more innovation-friendly has become increasingly clear. We urge leaders on both sides of the aisle to support the kinds of common sense reforms found in these bills. The future of our economy depends on it.

2014 Year in Review - Small Steps Towards an Immigration Fix

This post is one in a series of reports on significant issues for startups in 2014. In the past year, the startup community’s voice helped drive notable debates in tech and entrepreneurship policy, but many of the tech world’s policy goals in 2014, from net neutrality to patent reform, remain unfulfilled. Stay tuned for more year-end updates and continue to watch this space in 2015 as we follow the policy issues most affecting the startup community.

There’s widespread agreement among policymakers and citizens alike that our immigration system is broken. But, despite this near-universal recognition that bringing foreign entrepreneurs to the U.S. to start businesses will improve our economy and create jobs, immigration reform remains elusive. Though the House has staunchly refused to consider moving immigration reform legislation, the President took action in November, issuing an Executive Order that takes small but important steps in the right direction. The President’s Executive Order expands immigration options for foreign-born entrepreneurs and makes it easier for high-skilled workers awaiting Lawful Permanent Resident status to change jobs. While these changes are important, the kind of reform that will more fully address the challenges of our country’s immigrant system remains within the purview of Congress.

Until Congress takes on the issue, an outdated immigration system continues to be one of the greatest threats to American entrepreneurship and business growth. Demand for high-skilled employees in the tech industry remains higher than ever and continues to build. And while American universities educate thousands of foreign-born students in STEM fields every year, these students often have few legal employment options in the U.S. and end up returning to their home countries. The President’s plan addresses this problem by seeking to expand the Optional Practical Training program, which permits foreign-born STEM graduates to stay and work in the U.S. Ultimately, however, the OPT program is temporary, and more action needs to be taken in order to allow these talented, U.S. educated STEM graduates to work and build companies in the U.S.

Those high-skilled workers who are eligible to stay in the U.S. often do so through H-1B visas, which have myriad complications and limitations. For one, the supply pool is capped at 85,000, and they’re only issued once a year via lottery. Companies simply can’t rely on winning this lottery, especially startups that “live and die by speed,” as the CTO of Zenefits explained. Further, visa-holders are barred from switching employers, even if they’re afforded better opportunity at another company. This particular restriction was addressed in the President’s recent executive action, which plans to allow highly skilled workers and their spouses to obtain a portable work authorization as they wait to acquire more permanent residential status. However, the executive action did not raise the visa supply, a policy request that’s been a priority for the tech community for years. Only legislative reform will increase the woefully inadequate supply of visas for high-skilled foreign workers.

When it comes to high-skilled workers, our immigration system’s shortcomings may be most devastating for the aspiring entrepreneurs it impedes. The economic case for creating opportunities for immigrant entrepreneurs couldn’t be clearer: a Kauffman study found that immigrants are nearly twice as likely to start a business than native-born Americans.

Yet, under the current rules, a potential founder cannot leave her company in pursuit of starting her own business. The President’s Executive Order also proposes to mitigate this deficiency by creating special immigration rules for founders who can prove they’ve created jobs, attained investment, or generated revenue. We’re excited to see the details of this new immigration pathway released in the next year and hope promising entrepreneurs can take advantage of the opportunity. Nonetheless, the plan falls short of establishing a true founder’s visa.

More countries around the globe are creating attractive opportunities for entrepreneurs seeking a home to build their businesses. Canada, Chile, and New Zealand are just a few of the places welcoming entrepreneurs with legal residency status and even funding through “startup visas.” While the United States Congress stands idle, entrepreneurs are packing up and moving elsewhere. As Reddit founder Alexis Ohanian told CNNMoney, “The next Stripe, or the next Google is one annoying visa application away from just starting in Canada.”

Looking to 2015, the new Republican Congress seems eager to undo the President’s Executive Order, but whether lawmakers will simply attempt to reverse the President’s actions or actually work to fix the many flaws with our immigration system remains to be seen. While comprehensive immigration reform remains a political third rail among Republicans—particularly in light of the 2016 presidential election—it is possible that lawmakers may attempt a piecemeal approach to immigration reform that addresses problems with the high-skilled immigration system, leaving more politically fraught questions relating to undocumented immigrants untouched. Whether comprehensive reform or an issue-specific approach is more achievable, immigration reform must be a policy priority for all members of Congress in 2015 if we are to maintain our position as the best place in the world for entrepreneurs to start new and innovative businesses.