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Current U.S. immigration policies make it almost impossible for foreign entrepreneurs to start companies in the U.S. This episode explores how a startup visa can resolve this.
Welcome to the Venture Capitol podcast, the place where politicians can impact the startup industry nationwide. Join NVCA President & CEO Bobby Franklin for a unique podcast that looks at public policy through the eyes of America’s venture capitalists — the people who are investing in the high-growth companies of tomorrow. This show brings together VCs, policymakers, and policy influencers to discuss and debate issues that affect our nation’s economic future.
Bobby Franklin (00:06):
Hello, everyone. I'm Bobby Franklin. And welcome back to Venture Capitol, a podcast brought to you by NVCA, where there's an O in capitol, as in Capitol Hill, where NVCA advocates for policies that support the US startup ecosystem. One of the biggest policies we advocate for deals with making America the best place for creating and growing new innovative companies.
Bobby Franklin (00:31):
The US needs to attract the world's best entrepreneurs. We must be able to compete globally for talent, but right now we are not winning that talent race. In this episode of Venture Capitol, we are talking about the need for a startup visa. For those not familiar, a startup visa allows foreign entrepreneurs to come to America to build American companies and create American jobs. Right now, the US does not have a startup visa, but other countries do. To cover all angles of this important issue, we have some great guests.
Bobby Franklin (01:05):
You'll hear from California Congresswoman Zoe Lofgren, who introduced startup visa legislation, NVCA's policy expert on the issue, Jeff [Farra 00:01:14], and Nishant Rastogi, a foreign entrepreneur who built a company in the US, but was forced to leave America last year because of the lack of a startup visa. We start the show with the Congresswoman.
Bobby Franklin (01:26):
I am so pleased to welcome our guest today on Venture Capitol, Congresswoman Zoe Lofgren. She's a Democratic member of the United States House of Representatives, and she's served there since 1995. She represents the 19th District of California, based in the capital of Silicon Valley, San Jose, and the Santa Clara Valley. She's Chair of the Committee on House Administration.
Bobby Franklin (01:51):
She's a member of the Committee on the Judiciary, where she chairs the Subcommittee on Immigration and Citizenship, and certainly want to talk to her about immigration today. She's also a member of the Committee on Science, Space, and Technology. Congresswoman Lofgren, thank you so much for joining us.
Congresswoman Zoe Lofgren (02:08):
My pleasure.
Bobby Franklin (02:09):
So I mentioned your district being the capital of Silicon Valley. Can you talk to us a little bit about how you see the entrepreneurial ecosystem and the venture capital investors close up in your district?
Congresswoman Zoe Lofgren (02:23):
Sure. I actually grew up in Silicon Valley before it was Silicon Valley, and I've seen the tech sector rise up around what was then an agricultural valley, primarily. And it's been a real thrill to see all of the scientists and inventors and technologists and investors that have created really an economic engine that is carrying the entire state of California.
Congresswoman Zoe Lofgren (02:53):
You can't single out just one or two people, but I think government can do some things. Government can't create a company or an idea or an invention, but what we do can actually provide a framework for innovators and investors and companies to flourish and thrive. Sometimes it's by what we do and sometimes it's by what we don't do. I was remembering almost 10 years ago last month when we stopped the Stop Online Piracy Act, which would've crippled the internet, frankly.
Congresswoman Zoe Lofgren (03:33):
And it's a rare occasion when a member of Congress can say, "I did that." This is a team sport in Congress, but I know that had I not taken the steps that I had, likely there would've been a different outcome. That's an example of making severe technical mistakes in pursuing an actual problem. I mean, piracy is in fact a problem, but the remedy advance was a catastrophe. So that's an example where you can prevent something from crippling innovators.
Congresswoman Zoe Lofgren (04:14):
I think about so many companies that have come and gone in the Valley. I mean, Jim Clark and Silicon Graphics was so exciting. It's in the rear view mirror now. Netscape's in the rear view mirror. I remember back in I think it was 1999 when Eric Schmidt, who I knew from his days as an engineer called me and said, "You got to see this new thing I'm working on, this new startup." And I went up, I think it was in Palo Alto, and it was a little tiny space and Eric had foosball.
Congresswoman Zoe Lofgren (04:52):
And I thought, "Oh, come on. This is not the right era." But he said, "Well, it's just fun. Isn't it okay to be nostalgic?" And of course it is. So, the companies come and go. The technology always comes forward, but there's always something new. I mean, now we have Zoom. It's actually just a few blocks from where I am now in Downtown San Jose. So it's been a real honor and privilege to represent this area.
Bobby Franklin (05:27):
Well, Congresswoman, you're talking about your district and how much you have seen it change there in Silicon Valley. A lot of people around the world, we know over the last couple of decades have come to Silicon Valley, studied what it takes to create dynamism in their own countries. And one of the things that has baffled us here at NVCA is why can't we get an immigration avenue for entrepreneurs around the world to come to the US?
Bobby Franklin (06:02):
And we've always referred to it as startup visa. And let me just say, thank you so much for your leadership in introducing the LIKE Act, which stands for the Let Immigrants Kickstart Employment Act. It's one of these things where anybody we've talked to on Capitol Hill, either side of the aisle, when we say, "Hey, wouldn't it be a smart idea if there is an entrepreneur somewhere in the world that wants to come to the US and start a company, wouldn't we like to almost roll out a red carpet and have them come do it?"
Bobby Franklin (06:35):
And you've clearly picked up on that and you've introduced legislation. Talk a little bit about that process. What stands out to you about introducing a bill like a startup visa?
Congresswoman Zoe Lofgren (06:47):
Well, first, let me thank you and the organization for the very helpful input that you provided on what is the rhythm of a successful tech company, because we want to make sure that we're targeting legislation to real world benchmarks in terms of success. So, that's been very helpful. It's a sad day really, where we are in immigration.
Congresswoman Zoe Lofgren (07:13):
I introduced the bill, although I know there are some Republican members who agree with it, I couldn't get a single Republican to put their name on the bill. So I finally just introduced it myself, and it's become such a hot button for Republicans because they've politicized immigration to inflame anti-immigrant sentiment for political advantage, to the point where you can't even make smart business decisions on immigration.
Congresswoman Zoe Lofgren (07:42):
It's one of the reasons why we see tech centers like Toronto now surging at our expense. I mean, you know that the tech recruiters from Canada are down here in Silicon Valley.
Bobby Franklin (07:57):
Well, speaking of Canada, they have a startup visa-
Congresswoman Zoe Lofgren (08:01):
Yes, they do.
Bobby Franklin (08:02):
... like a couple of dozen other countries. And that's where I think this is... My colleague here at NVCA says it's the ultimate free lunch for our country. If we would just get our act together and get this across the goal line, we could have a free lunch, meaning we could have companies and jobs immediately, if we had a way for entrepreneurs to come here.
Congresswoman Zoe Lofgren (08:22):
Well, it doesn't make any sense what we're doing now. And along with many other things in immigration law, we're looking for other roots to move it forward. I serve on, as you mentioned, not only the Judiciary Committee, chairing the Immigration Subcommittee, but also the Science Committee, where I've been proud to serve for many, many years.
Congresswoman Zoe Lofgren (08:44):
And the America Competes Act was primarily shepherded through that committee. But after we were through, I had a chance to include through the Rules Committee two important provisions and a few others on immigration. One is the LIKE Act. If you want to be competitive, you need scientists to compete. And the other is a provision for recipients of PhDs from research universities in the United States or their equivalents in other countries, to obtain permanent residence without regard to numerical limitation.
Congresswoman Zoe Lofgren (09:27):
Those are two very key provisions that I hope will stay in the bill. We've got a few other bells and whistles in terms of dual intent for some students pursuing higher ed and STEM fields and other essential personnel with a Master's in some fields and medical doctors. But I'm hoping that especially the LIKE Act can make it completely across the finish line.
Bobby Franklin (09:56):
Well, we're going to work hard to help do just that. We have already been talking to your colleagues across the Capitol in the Senate side, both sides of the aisle to point out how important this bill is and how important it is to the competitiveness of the country. So we want to be your partner in that, and we'll keep working on that.
Congresswoman Zoe Lofgren (10:18):
Very good. I know that the Biden administration is intending to support these provisions and I've been in touch with them as well. It's very welcome news.
Bobby Franklin (10:26):
That's awesome. Well, once again, can't thank you enough for your work on this. This is so important to... Look, it's important to the country. It's certainly important to your congressional district. It's important to your state, but it's important to every state because there are entrepreneurs around the world that want to come here. Although I have to say a lot of these other countries have figured out that if you can mimic the ecosystem that we've created in this country by making sure they're investors and there's long term capital to support those entrepreneurs, you can keep them there.
Bobby Franklin (11:03):
And we see it in the data. Not 20 years ago, over 80% of global venture capital dollars went to US startups. And now our marketshare's about 50%. Now the good news is there are a lot of countries that need entrepreneurship, so we don't want to take it all back, but we want to make sure that we are attracting the best and brightest from around the world from a competitiveness standpoint.
Congresswoman Zoe Lofgren (11:28):
Just take a look at some of the companies. I mean, I was just thinking about Eric Schmidt, who was the grown up at Google at the beginning, but Sergey Brin and Larry Page, starting that up at Stanford, they had NSF grants. Sergey is not an American-born person, so now you have tens of thousands of Americans happily employed in that company, earning good salaries and creating a lot of innovation.
Congresswoman Zoe Lofgren (12:01):
That is replicated across Silicon Valley, but I would note this: The Venture Capital Association provided essential advice on the rhythm of entrepreneurship, but these startups are not limited to tech companies. It could be any company where an entrepreneur can start a business and employ Americans and add to the prosperity of the United States. Why wouldn't we want that?
Bobby Franklin (12:28):
It makes sense. Venture capital is rocket fuel for people like... You mentioned the founders of Google, when they're trying to really scale up into something big, and that turns out happens to come with lots of jobs, and that's what the country needs. And even though a lot of the capital is concentrated in your district and maybe in New York and in Massachusetts, the jobs are spread out across the country.
Bobby Franklin (12:54):
In fact, over 60% of the jobs of VC-backed companies are outside of California, New York, and Massachusetts. And I think that's a good message for all policy makers.
Congresswoman Zoe Lofgren (13:04):
Well, and it's important to really celebrate the VC model, because if you take a look, people like to analyze how did Silicon Valley emerge, why here? And there are a number of factors. A lot of people think of Dean Terman at the Stanford School of Engineering being a key component. I think that was important, but it wasn't all of it.
Congresswoman Zoe Lofgren (13:26):
Some of it is people like to be here, because it's a great place to live. I think what Stanford did in terms of partnering its faculty with industry, which was not done in other parts of the country, also played a role. But if you don't look at the role of venture capital, you're missing really the engine because it's risk-taking and it's not like getting a bank loan where you have to have everything in place.
Congresswoman Zoe Lofgren (13:52):
It's evaluation of risk and it's really banking on ideas and talent with the understanding that you're going to lose sometimes. But the unicorns and the successes will more than make up for the losses, and that's proven to be true. And it's absolutely fueled the technology industry.
Bobby Franklin (14:15):
I agree. The other thing that is unique about our country compared to others is that when there is a failure, because as you said, most of the early stage investments fail. They do. But thankfully, there are the investors to take those lumps, knowing that some are going to succeed. And when they do, they're going to have a really good outcome. It has been well, somebody that failed learned. You learn a lot more from your mistakes and your failures than you do your successes.
Congresswoman Zoe Lofgren (14:45):
Failure is a learning experience.
Bobby Franklin (14:48):
And that makes them that much closer to a success. So couldn't agree more. I want to turn to another topic, anti-trust. You're on the Judiciary Committee. You have big tech companies in your district.
Congresswoman Zoe Lofgren (15:01):
And little ones.
Bobby Franklin (15:02):
I know there's bipartisan anger at big tech companies and there are a lot of different bills that are looking to go after the big tech companies. One area that we have been particularly interested in are the legislative efforts to stop the mergers and acquisitions of the big tech companies.
Bobby Franklin (15:26):
And you led an effort on the House side to say, "Hey, wait a minute now, there's another side of this table." You, your colleagues are focused on four, maybe five companies, but when it comes to mergers and acquisitions, it's that entrepreneurial ecosystem sitting on the other side of that table, that you need there to be exits and you need companies to be bought by others. And you need that entrepreneur and those investors to take those exit opportunities and then turn it back into another company, and let's go do it again. And I really appreciate the work you've done on this. Talk about this issue though, of anti-trust and the big tech companies.
Congresswoman Zoe Lofgren (16:13):
Well, I think you're right. There is a lot of animosity towards the tech sector among some members of the House and Senate. I think to be honest, there are some really serious issues in some of the social network space that involve disinformation and manipulation of data to the disadvantage of democracy and also for commercial and cultural purposes. That's problematic. These anti-trust bills do nothing about that, however.
Congresswoman Zoe Lofgren (16:49):
They basically, as drafted, target or meant to target just four companies and those four companies are Amazon, Google, Facebook, and Apple. Now it's interesting that that's never been the way anti-trust bills have been written in the past. Interesting that with Facebook's dive in the stock market, it may have fallen off the list, which I don't think is what the authors intended.
Congresswoman Zoe Lofgren (17:16):
It's not the way to approach this, number one. Number two, I think there are legitimate issues in mergers and acquisitions. You can look at some of the larger companies and say, "Hmm, some of those acquisitions were meant to kill competition and had really competition problems." The truth is, most of those questionable acquisitions or mergers were never challenged. So it's not at all clear that the current law is insufficient to protect competition, because no one tried.
Congresswoman Zoe Lofgren (17:54):
Number three, you're right. You're starting a company and there are really three exit ramps. You can go bankrupt, you can be acquired, or you can go public and they're all viable, but going public is not that easy. So to say as the Jeffries bill does that these three or four companies are prohibited, and basically that's what the bill does, prohibited from all mergers and acquisitions, I think is the wrong approach. I also think that the other bills, the Jayapal and Cicilline bill would actually require the breakup of these four companies.
Congresswoman Zoe Lofgren (18:37):
It's a goal, not a remedy. That remedy sometimes is necessary. Take a look at what happened with the telecoms, with Judge Green here in the District of Columbia. And later, the Telecom Reform Act in '96, that was a necessity. And actually, that monopoly had crippled technology innovation. Look what's happened since that, but usually as I say, that's a remedy, not a goal.
Congresswoman Zoe Lofgren (19:07):
The whole approach is incorrect and inconsistent with history. Having said that, I do think competition policy is very important and if any of these companies or others, either in the tech sector or outside of the tech sector, pharmaceuticals, airlines and transportation, if there is restraint of competition, then there ought to be action to break that stranglehold on competition.
Bobby Franklin (19:39):
I think you've described it in a really elegant way, because you're right. There is a time and a place and a procedure to deal with some of the issues. But I think you hit on the concern we have, which is by making some blanket statement that these companies can't continue to do mergers and acquisitions, you're completely ignoring who's sitting on the other side of that table, and how that can be healthy and good for the entrepreneurial ecosystem and to move things along.
Bobby Franklin (20:12):
I really appreciate your work there. We all do. Congresswoman Lofgren, can't thank you enough for your work on immigration. Can't thank you enough for your work on anti-trust, making sure that we think about the entrepreneurial ecosystem. We look forward to continuing to partner with you as much as we can, to make sure your district and those all across the country are vibrant with entrepreneurial activity. Thank you for joining us today.
Congresswoman Zoe Lofgren (20:38):
Thanks a lot.
Bobby Franklin (20:44):
My next guest on Venture Capitol is our very own general counsel, Jeff Farra. Jeff has been with NVCA a number of years and leads a bunch of our public policy issues. Jeff, thanks for joining us on Venture Capitol.
Jeff Farra (20:57):
Bobby, it's great to be here. Thanks for having me.
Bobby Franklin (20:59):
Jeff, we're talking about immigration today, and that's an area that you lead us on. So it's great to have you here. The first question I have is why do we at NVCA focus on the issue of immigration?
Jeff Farra (21:12):
Well, Bobby, the reality is that foreign-born entrepreneurs have played an incredible role in the American economy, especially in the last 50 years or so as venture capital has risen in this country. And for those in the venture industry, they understand implicitly the role that immigrant entrepreneurs have played.
Jeff Farra (21:30):
There are so many companies that are just iconic American brands and companies that were founded by first generation and second generation immigrants into this country. All you have to do is look back at the COVID-19 pandemic and you see companies like Pfizer and Moderna, that were founded by immigrants. They have immigrant CEOs.
Jeff Farra (21:49):
You think about Zoom, that made it a lot easier for us to all navigate the pandemic. The founder of Zoom was an immigrant, and then you think of other companies out there that are even more obscure, companies like DuPont and Levi Strauss, and the list goes on and on, in terms of the companies that are out there that we're fortunate that immigrants decided to come to this country and launch new high-growth companies.
Bobby Franklin (22:11):
That's such a good point. I'm so glad you mentioned those companies and I know we've looked at studies where whether you look at unicorn companies or you look at other demographics of companies and there's just a super high correlation to founders or co-founders being immigrants, or certainly second generation.
Bobby Franklin (22:29):
I guess the question I have for you is as you think about how important it is as an issue, walk us through some of the history and some of the work that NVCA has done on this issue.
Jeff Farra (22:43):
Sure. Bobby, you alluded to a lot of the stats out there and they're really incredible. Some studies find that about half of unicorns in this country are from foreign-born founders. There's an NVCA study that looked at the public companies, companies who went public in the 2010s. And we found that about a third of all venture-backed CEOs were by foreign-born entrepreneur founders, and then a group we partner a lot with that you're on the board of is the Center for American Entrepreneurship, and they found that 43% of the founders of Fortune 500 companies were founded by first or second generation immigrants.
Jeff Farra (23:19):
So clearly, the impact is incredible, so what we've done over time is to really try and shine a light on the immigrant entrepreneur and make sure that policy makers understand the rich history that has happened, but also understand a lot of the challenges that are in place. Because as great as this history is, the unfortunate reality is that this country, we make it far too difficult for a foreign-born entrepreneur with a great idea to come to the United States and launch a new high-growth company.
Jeff Farra (23:47):
So we have lobbied for a number of years on an idea called the startup visa. We've also been active on something very similar called the international entrepreneur rule, and this has been the corner of the immigration universe that NVCA has really led on, because we understand that our members are very, very anxious to try and work with the next generation of great American companies. But we need those founders to come to the United States in order to do that.
Bobby Franklin (24:11):
That's a great point. I know another stat that we use a lot is just looking back, not that very long ago, 15, 20 years, I think it's something like we in the United States had 80 to 90% of global venture capital dollars invested in our country. And as you and I know, the last few years, that's dropped down to about 50%, which means that on a global perspective, we have lost marketshare.
Bobby Franklin (24:36):
Now the good news is it doesn't mean we've invested any less, and in fact, we continue to set records, but what it shows is the of the world has figured out what it means to support entrepreneurs and build great companies in their country. So now even if we had a startup visa, the next step after that I think is still to convince people that they want to come to the United States, but we can't do that if they don't have a pathway here.
Bobby Franklin (25:07):
Jeff, let's talk about some of the different areas that we have worked on, on this issue. I know that startup visa efforts were here before you and I got to NVCA. We're hoping to help usher across the goal line, but maybe you could talk about different efforts. And I would also include our efforts around the international entrepreneur rule, going back to the Obama administration, through the Trump administration, and now into the Biden administration.
Jeff Farra (25:36):
Absolutely, Bobby. It's been a key area for NVCA over the years. I would begin by noting that in the 2013 comprehensive immigration reform bill that passed the Senate, which is really the biggest immigration piece of legislation that's happened in the last few decades, there was a startup visa that was included in that bill.
Jeff Farra (25:55):
And that was certainly something that was incredible to see, but it unfortunately didn't make it across the finish line. We've also been very supportive of some discreet startup visa legislation over the years. The most notable is the bipartisan Startup Act. And that's from a group of US Senators led by Senator Mark Warner, former venture capitalist, Senator Jerry Moran from Kansas, and they're joined by Senator Klobuchar from Minnesota and Senator Blunt from Missouri.
Jeff Farra (26:22):
And the Startup Act does a lot of great things to promote startup activity in this country, and it's been a fantastic platform for doing that. The startup visa piece is certainly the most consequential to the venture ecosystem. So that's something that we have lended support to for a number of years. And then most recently, Congresswoman Zoe Lofgren introduced the Let Immigrants Kickstart Employment Act. And that was a bill that we were thrilled to both work with Ms. Lofgren's staff on as well as lend our support.
Jeff Farra (26:52):
We ended up rallying a group of 19 entrepreneurial-focused organizations to back that bill and have really been pushing it ever since it was introduced in August of 2021. So the latest thing that's happened there is very exciting, which is that Congresswoman Lofgren was successful in having her bill included in the House competitiveness bill that passed recently, this is called the America Competes Act. So the Lofgren bill has passed the House, and as Congress kicks off discussions on a competitiveness bill, we are hopeful that the Senate and House will decide to include this in the final version.
Jeff Farra (27:32):
So NVCA has been hard at work the last several weeks really making the case for why it is that a startup visa is an integral part of competitiveness legislation, because ultimately we can put all the money we want to into basic research and technology transfer, and we're certainly supportive of those things, but ultimately what we need most in this country is a company to pop out the other end. We need to make sure that there are founders that are ready to go to take that technology that is federally backed and turn it into new private sector companies that Americans can go to work at.
Jeff Farra (28:06):
And Bobby, you mentioned the international entrepreneurial role, I'll just mention briefly, this is something where in the final days of the Obama administration, it became clear that comprehensive immigration reform was not going to move forward. And so the administration decided to take a look at the tools and resources that they had from an administrative agency perspective and see how it is that they could make it easier for foreign-born entrepreneurs to come to the United States.
Jeff Farra (28:31):
And that was how the international entrepreneur rule was first created, and NVCA was very actively involved in that process throughout the comment period. And that rule was actually finalized just a handful of days before President Obama left office. So when President Trump came into DC, we knew we had our work cut out for us and we needed to go and try and convince them to retain this job creation instrument.
Jeff Farra (28:56):
So we lobbied the Trump administration, and unfortunately, they decided to pull the rug out from under the international entrepreneur rule. That then resulted in NVCA filing its first ever lawsuit against the federal government. We alleged that they had violated the Administrative Procedure Act in terms of how it was they took down the entrepreneurial rule.
Jeff Farra (29:16):
And fortunately, we won in federal court, which was a great victory for the entrepreneurial ecosystem. So that enabled the Biden administration to step in its early days and really breathe new life into the international entrepreneur rule. And as a result, we're seeing foreign-born entrepreneurs applying for this. And it's been fantastic to see a lot of our members, even back entrepreneurs that are using the international entrepreneur rule.
Bobby Franklin (29:40):
Jeff, we talked about the LIKE Act, we talked to Ms. Lofgren earlier in the episode, we know and you just shared with us that it's part of the Competes Act now. We hope it is able to get across the goal line, but if it doesn't, I mean, we're not giving up here. What's our next game plan if it doesn't work in the Competes Act?
Jeff Farra (30:00):
Immigration politics being what they are, it's always a challenge, and we do recognize that there is some resistance to including this in the competitiveness bill. We are trying to overcome that actively right now. If ultimately we're not in the final package, then we will continue to try and build support for standalone legislation.
Jeff Farra (30:16):
Before the competitiveness bill was inclusive of a startup visa, Representative Lofgren was hard at work building support for her bill, trying to move that through the House. We were very actively trying to help her do that. I think one of the great things about the bill being included in the competitiveness bill is that it's really given us a reason to go knock on more doors up on Capitol Hill, talk more about this problem, and when we're talking about it, you see a lot of heads nodding.
Jeff Farra (30:40):
You see a lot of people understanding that this is an ultimate free lunch, to be able to have these individuals come here to our country to create new American jobs. So this is something where whether or not we're ultimately in the final competitiveness bill, we're finding a lot of new friends and new supporters up on Capitol Hill that understand that our country needs the dynamism that only can come from new company formation, and one way to achieve that is to have more immigrant entrepreneurs in our country.
Bobby Franklin (31:08):
I think you said it well. We're not going to let an effort if this doesn't work stop us. We've been at this a long time, as you pointed out. NVCA was working on this before we got here. So we're going to keep at it until we get it across the goal line. Jeff Farra, thank you so much for joining us today on Venture Capitol.
Jeff Farra (31:26):
Thank you, Bobby.
Bobby Franklin (31:32):
And last, but certainly not least is my next guest. He's a foreign entrepreneur who came to study in the US and then created a company here. But last year, he was forced to leave because we don't have a startup visa. Please welcome Nishant Rastogi, who is joining us from India. Hello, Nishant.
Nishant Rastogi (31:51):
Hi, Bobby. How's it going?
Bobby Franklin (31:52):
Great. Thanks for joining us. Nishant, tell us about how you came to the US to begin with, to start your school career here.
Nishant Rastogi (32:01):
I came to the US for computer science at University of California in the beautiful city of San Diego, and when some original dreams of actually studying technology and computer science and also starting a company one day. And part of the reason that I picked the US is the Silicon Valley's there. It's the tech capital and the tech hub of the world, and you have all the top and the best, most innovative companies that are coming out of California specifically.
Nishant Rastogi (32:42):
So I wanted to be part of that ecosystem and build a new technology business. I had this dream or the thought process started shaping up back in the ninth grade, that hey, one day I want to start a company in the US in Silicon Valley, one day. So it was a dream come true coming to the US, studying in So Cal and moving to the Bay Area after that and starting the company.
Bobby Franklin (32:54):
Tell us about the company.
Nishant Rastogi (32:55):
Yeah. So my company is [Make 00:32:55], and what we are doing is we are digitizing the process and the industrial manufacturing, specifically when it comes to ordering custom manufactured parts, whether it's 3D printed parts, so we do a lot of 3D printing, or it's a CNC machining parts or injection molding parts.
Nishant Rastogi (33:18):
So if you look at the process of manufacturing today, so let's say you're an engineer or mechanical engineer at a mid-market company, or even companies like Tesla, Apple, or Google, the way you procure parts is extremely slow, manual, and complex, even in 2022. So the way the current process works is heavily reliant on legacy infrastructure such as email, phone calls, and attachments and spreadsheets. And there is no way to digitize or there is no digital platform for something like this. And the whole process is extremely complex and long and slow.
Nishant Rastogi (33:50):
So if you look at a car, for example, a typical car tends to have electronic items and the audio systems from about six years ago. And the reason that it took six years to assemble and procure all the different parts to make a vehicle. So what we are doing is we are building digital platforms to really automate, digitize, and simplify the way engineering teams today procure parts. So we have been able to bring down the timeline to procure parts from all the way from 18 months, traditionally 18 months to as fast as one week or two weeks.
Nishant Rastogi (34:25):
And the way we've been able to do it is by building a digital network of shops across the US and some in the Asia region. Again, that depends on the quantity of parts you need. So yeah, and I think this is extremely helpful to the local manufacturers across the US who are extremely good at manufacturing parts, but they lack technical expertise or the sales and marketing expertise to sell to the Microsoft and the Google of the world.
Nishant Rastogi (34:51):
So, we help them out a lot too, and as we grow, they grow and they can hire more people. So the manufacturing sector grows with us.
Bobby Franklin (35:01):
Let me ask you a question, Nishant, just to make sure I understand. So you are sitting at that intersection, making it easier for your customers. Now, who are your customers?
Nishant Rastogi (35:11):
Right. So, my customers are mechanical engineering teams and supply chain teams at autonomous vehicle companies, at electric vehicle companies, at medical device companies, consumer electronic. Since manufacturing is less of a vertical thing, more of a horizontal thing, we provide our services to companies across the board, but we are heavily working with autonomous and electric vehicle companies.
Nishant Rastogi (35:34):
Robotic companies are a huge segment, IOT, wearables. So this is huge, and one of our client is Microsoft, for example, and Stanley, Black & Decker, another Fortune 10 company.
Bobby Franklin (35:46):
So you created this company and I think you founded it in 2017, is that correct?
Nishant Rastogi (35:52):
Well, yeah. Well, 2017 to about 2019, mid-2019, I was pursuing a different idea along 3D printing, but the exact business that we are building right now came about in the middle of 2019.
Bobby Franklin (36:05):
Awesome. Takes a while when you're an entrepreneur.
Nishant Rastogi (36:08):
It's also my first startup out of college, so I'm pretty humble, and I'm willing to pivot as and when needed.
Bobby Franklin (36:14):
Well, it sounds like a great business, but let's get of the issue of this podcast, which is about your immigration status. So you were over here on a student visa. You became an entrepreneur, you created a company that's bringing value to some of the largest corporations in our country, as well as some mid-market and startup corporations.
Bobby Franklin (36:34):
You've found an area that you can help basically everybody improve. You've helped drive out time, and time is money. And you found this niche, and then tell the story when you were basically told, "Sorry, you have to leave the United States," despite the fact that you're creating value here for so many people. Tell us about what happened that led you to have to go back to India.
Nishant Rastogi (36:58):
Yeah. So this was sometime in the 2019, 2020, the onset of COVID that I knew that hey, this is coming to an end. At that time, there was something called international entrepreneur rule that lets you I guess again, build a business for two years. And there are options of getting a green card or being on a visa call H-1B visa. But the H-1B visa is quite restrictive for a startup founder, especially an early one, because it has a lot of restrictions on the equity you can have.
Nishant Rastogi (37:32):
So you cannot be a majority control holder, and you have to have a structure in place that is in many cases quite hurtful to the business itself, and to your journey as an entrepreneur. So around that time, the international entrepreneur rule was canceled or basically inactive based on what I learned from all the attorneys I spoke with.
Nishant Rastogi (37:55):
So that was honestly one of my hopes to do that, and then maybe in the meantime, I had I would say a ray of hope that maybe I can structure my company in that two-year or one-and-a-half-year timeframe, so that I can fit for an H-1B visa, which is again, a lottery-based visa, and it's quite hurtful and hard to get. So I mean, at that time, I would say around early 2020, I knew that my time was coming to an end, then I have to go back to India. And unfortunately, I did, so I didn't come back.
Bobby Franklin (38:30):
So you moved back to India, but you're still running your company. I assume you're having to do it in the middle of the night to try to run your company here in the US. Is that the way it's working?
Nishant Rastogi (38:40):
Yeah. I mean, I'm in India, which is a completely opposite time zone to the US, especially California. So I work from I would say... I start around 10:00 PM here and work until 6:00 to 7:00 AM in the morning. So my schedule is completely California's schedule almost.
Bobby Franklin (39:00):
But your desire, you have companies, well-known companies in the US, they're your customers. Your desire is to build a big business to significantly make a difference. And in this case, the new wave of 3D manufacturing and making sure we make progress here, so you're back in India, you're basically running a company remotely in a weird time zone, the exact opposite time zone.
Bobby Franklin (39:26):
You could obviously benefit from a startup visa, and I'm sure you're aware that there are countries around the world that have created startup visas that exactly fit this fact pattern so that you can, as an entrepreneur who is creating value, creating jobs, solving problems, you can do that here in the United States, which as I heard your story, that's exactly where you want to do it. Correct?
Nishant Rastogi (39:51):
Yeah, so I think you were asking why America. So I think America is really special and California in America is extremely special place. In the Bay Area, you have something called a beehive effect, where you have incredibly talented people that come here from across the world who are willing to take a bet on new technological advancement and innovation. And the people there have growth mindset, and they're more willing to try out new ideas and new bizarre, crazy approaches to solving problems.
Nishant Rastogi (40:23):
And since they're quite open-minded, a lot of them, again, tend to find success. And the result is these massively innovative and large companies like Tesla, Apple, Google, et cetera. So, there's some kind of magic that I see in the Bay Area that is hard to replicate, and it's all because of the people there.
Bobby Franklin (40:44):
Well, the thing that strikes me about your story is that A, it's so important that we get a startup visa in our country so that you... Frankly, you should have a red carpet. You should have a, "Let's welcome you here with open arms," because you're creating jobs, you're solving problems, you're helping our existing companies. But the other thing about your story that I picked up on is it's not just the Teslas or the EV car makers or the Microsofts, or others.
Bobby Franklin (41:15):
You're also helping the manufacturing base, which can it be located outside of California, could be a manufacturing company somewhere else in the middle of America where you're helping be the go-between, take out time for those manufacturers to be able to create new and innovative products for existing, large corporations. You're helping all parts of this ecosystem.
Nishant Rastogi (41:41):
We are present in more than 25 states in the US, and we have manufacturers across Michigan, Texas, Illinois, the Carolinas, Colorado and all these states. So what is interesting is these people are highly scaled, extremely good manufacturers when it comes to... The technical term of tolerances, for example, they're extremely good at making parts, but they are also generations... They're a third generation shop, that they're running because their grandfather started it, and their father took on, and all that.
Nishant Rastogi (42:16):
So these guys are extremely good at making parts and have a lot of experience, but what they lack is technical expertise. So having a company like Make in the middle is extremely helpful for them to grow, for their business to grow, and for them to hire more people, which does promote and flourish the manufacturing sector, which is the [inaudible 00:42:39] for the US. It needs to have a resilient supply chain and we saw that during COVID crisis.
Nishant Rastogi (42:44):
So I think manufacturing sector needs a lot of boost and my company is playing its role in providing that boost. But like you said, I would love to have the US let me come there and build my business, because working opposite hours is quite hard. And you want to be in the ecosystem to talk to people and meet them.
Bobby Franklin (43:05):
Well, I think you have just given us an incredible commercial on why it is so important that we in the United States find a way to make sure that entrepreneurs like you have a chance to come here and build such an amazing company that can have such a positive impact as you said on 20-some odd states so far.
Bobby Franklin (43:28):
If you were here, if you could get around and see others in other states, that would probably be every state. Let me just ask you, if you could talk directly to policy makers here in Washington, what would your message be to them?
Nishant Rastogi (43:42):
To keep America competitive at a global level, we need not close the doors to amazing talented people who really want to come to America and build a great business. We want to rather welcome them like you said, with a red carpet. And these people can build great startup businesses in the American economy and will surely provide a lot of employment to a lot of American people, and who doesn't want that?
Bobby Franklin (44:05):
That's great. Nishant Rastogi, joining us from India, thank you so much for sharing your story about why a startup visa is so important to help your company and how your company could help so many all across the country. Thank you for joining us on Venture Capitol.
Nishant Rastogi (44:23):
Thanks a lot, Bobby. I really appreciate the conversation.
Bobby Franklin (44:30):
Well, that wraps up this episode of Venture Capitol. Thanks for listening, but before we gavel out, here's another fun fact about Washington. Did you know that two presidents kept alligators at the White House? It's true. Both Herbert Hoover and John Quincy Adams had pet gators at the White House.
Bobby Franklin (44:47):
Again, thank you for listening to Venture Capitol, a podcast brought to you by NVCA. Hope you enjoyed the show, because investing in tomorrow starts with smart policies today. I'm your host, Bobby Franklin, wishing good days ahead. Bye for now.