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January 17, 2019
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Harvard Business School

Why Silicon Valley needs more visas

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When I hear protesters shout, “Immigrants are welcome here!” at the San Francisco immigration office near my startup’s headquarters, I think about how simple a phrase that is for a topic that is so nuanced, especially for me as an immigrant entrepreneur.

Growing up in Brazil, I am less familiar with the nuances of the American debate on immigration legislation, but I know that immigrants here add a lot of jobs and stimulate the local economy. As an immigrant entrepreneur, I’ve tried to check all of those boxes, and really prove my value to this country.

My tech startup Brex has achieved a lot in a short period of time, a feat which is underscored by receiving a $1 billion dollar valuation in just one year. But we didn’t achieve that high level of growth in spite of being founded by immigrants, but because of it. The key to our growth and to working towards building a global brand is our international talent pool, without it, we could never have gotten to where we are today.

So beyond Brex, what do the most successful Silicon Valley startups have in common? They’re also run by immigrants. In fact, not only are 57% of the Bay Area’s STEM tech workers immigrants, they also make up 25% of business founders in the US. You can trace the immigrant entrepreneurial streak in Silicon Valley from the founders of SUN Microsystems and Google to the Valley’s most notorious Twitter User, Tesla’s Elon Musk.

Immigrants not only built the first microchips in Silicon Valley, but they built these companies into the tech titans that they are known as today. After all, more than 50% of billion dollar startups are founded by immigrants, and many of those startups were founded by immigrants on H-1B visas.

Photo courtesy of Flickr/jvoves

While it might sound counterintuitive, immigrants create more jobs and make our economy stronger. Research from the National Foundation of American Policy (NFAP) has shown that immigrant-founded billion-dollar companies doubled their number of employees over the past two years. According to the research, “WeWork went from 1,200 to 6,000 employees between 2016 and 2018, Houzz increased from 800 to 1,800 employees the last two years, while Cloudflare went from 225 to 715 employees.”

We’ve seen the same growth at Brex. In just one year we hired 70 employees and invested over $6 million dollars in creating local jobs. Our startup is not alone, as Inc. recently reported, “50 immigrant-founded unicorn startups have a combined value of $248 billion, according to the report [by NFAP], and have created an average of 1,200 jobs each.”

One of the fundamental drivers of our success is our international workforce. Many of our key-hires are from all over Latin America, spanning from Uruguay to Mexico. In fact, 42% of our workforce is made up of immigrants and another 6% are made up of children of immigrants. Plenty of research shows that diverse teams are more productive and work together better, but that’s only part of the reason why you should bet on an international workforce. When you’re working with the best and brightest from every country, it inspires you to bring forth your most creative ideas, collaborate, and push yourself beyond your comfort zone. It motivates you to be your best.

With all of the positive contributions immigrants bring to this country, you’d think we’d have less restrictive immigration policies. However, that’s not the case. One of the biggest challenges that I face is hiring experienced, qualified engineers and designers to continue innovating in a fast-paced, competitive market.

This is a universal challenge in the tech industry. For the past 10 years, software engineers have been the #1 most difficult job to fill in the United States. Business owners are willing to pay 10-20 percent above the market rate for top talent and engineers. Yet, we’re still projected to have a shortage of two million engineering jobs in the US by 2022. How can you lead the charge of innovation if you don’t have the talent to do it?

What makes matters worse is that there are so few opportunities and types of visas for qualified immigrants. This is limiting job growth, knowledge-sharing, and technological breakthroughs in this country. And we risk losing top talent to other nations if we don’t loosen our restrictive visa laws.

H1-B visa applications fell this year, and at the same time, these visas have become harder to obtain and it has become more expensive to acquire international talent. This isn’t the time to abandon the international talent pool, but to invest in highly specialized workers that can give your startup a competitive advantage.

Already, there’s been a dramatic spike in engineering talent moving to Canada, with a 40% uptick in 2017. Toronto, Berlin, and Singapore are fastly becoming burgeoning tech hubs, and many fear (rightfully) that they will soon outpace the US in growth, talent, and developing the latest technologies.

This year, U.S. based tech companies generated $351 billion of revenue in 2018. The U.S. can’t afford to miss out on this huge revenue source. And, according to Harvard Business School Professor William R. Kerr and the author of The Gift of Global Talent: How Migration Shapes Business, Economy & Society, “Today’s knowledge economy dictates that your ability to attract, develop, and integrate smart minds governs how prosperous you will be.”

Immigrants have made Silicon Valley the powerhouse that it is today, and severely limiting highly-skilled immigration benefits no-one. Immigrants have helped the U.S. build one of the best tech hubs in the world— now is the time for startups to invest in international talent so that our technology, economy, and local communities can continue to thrive.

News Source = techcrunch.com

81% of VC firms don’t have a single black investor — BLCK VC wants to change that

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Venture capital has a diversity problem.

BLCK VC, a new organization founded by Storm Ventures associate Frederik Groce and NEA associate Sydney Sykes meant to connect, engage and advance black venture capitalists, is ready for a new era in the industry.

Their mission: Turn 200 black investors into 400 black investors by 2024.

“We think of ourselves as an organization formed by black VCs for blacks VCs to increase the representation of black investors,” Sykes told TechCrunch.

“You can look around and say ‘well, I know five black VCs,’ but you can also say this firm does not have a single black VC, they may not even have a single underrepresented minority … We want to make firms reckon with the fact that there is a racial diversity problem; there is a lack of black VCs and every firm should really care about it.”

BLCK VC has been at work since the beginning of 2018, building and expanding a network of black investors in the San Francisco area, Los Angeles and New York. They seek to provide a community for black investors, a space for honest conversations and questions, and a resource for VC firms looking to make more diverse hires. Today at AfroTech, the organization is taking the wraps off its plan to diversify the VC industry.

“There’s an incredible need to ensure there are resources in place so people don’t churn out of the community; getting people in the door is only half the battle,” Groce told TechCrunch. “This is us saying ‘hey, get involved.’ It’s time to broaden and give others access to what we are doing. It takes a village if we really want to see things start to shift.”

According to data collected by Richard Kerby, a partner at Equal Ventures, 81 percent of VC firms don’t have a single black investor. Roughly 50 percent of black investors in the industry are at the associate level, or the lowest level at a firm; only 2 percent of black investors are partners at a firm.

“It takes a village if we really want to see things start to shift,” BLCK VC co-chair Frederik Groce told TechCrunch.

The lack of representation, especially in powerful positions, has made it difficult for black aspiring investors to enter the industry, as well as for black investors to stay in VC.

“VC, more than a lot of industries, is very network driven in the way that they hire,” Sykes said. “The network started 40 or 50 years ago with a lot of white men who had the wealth at the time to invest in companies. As VC has grown, a lot of the people who started it hired people they knew, there wasn’t an effort to recruit from outside of their network. That has made VC this very homogenous industry.”

Aside from Kerby’s data and a Harvard Business School study on diversity in innovation, there is limited data available on black VCs and funding for black founders. Digitalundivided‘s research arm ProjectDiane is one of the few organizations to report on funding for black female founders, for example. According to its latest report, black women have raised just .0006 percent of all tech venture funding since 2009.

BLCK VC’s board includes Adina Tecklu, a venture investor at Canaan Partners; Brian Hollins, a growth equity investor at Goldman Sachs; Earnest Sweat, an investment manager at Prologis Ventures; and Elliott Robinson, a partner at M12 Ventures.

News Source = techcrunch.com

These schools graduate the most funded startup CEOs

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There is no degree required to be a CEO of a venture-backed company. But it likely helps to graduate from Harvard, Stanford or one of about a dozen other prominent universities that churn out a high number of top startup executives.

That is the central conclusion from our latest graduation season data crunch. For this exercise, Crunchbase News took a look at top U.S. university affiliations for CEOs of startups that raised $1 million or more in the past year.

In many ways, the findings weren’t too different from what we unearthed almost a year ago, looking at the university backgrounds of funded startup founders. However, there were a few twists. Here are some key findings:

Harvard fares better in its rivalry with Stanford when it comes to educating future CEOs than founders. The two universities essentially tied for first place in the CEO alum ranking. (Stanford was well ahead for founders.)

Business schools are big. While MBA programs may be seeing fewer applicants, the degree remains quite popular among startup CEOs.  At Harvard and the University of Pennsylvania, more than half of the CEOs on our list graduated as business school alum.

University affiliation is influential but not determinative for CEOs. The 20 schools featured on our list graduated CEOs of more than 800 global startups that raised $1M or more in roughly the past year, a minority of the total.
Below, we flesh out the findings in more detail.

Where startup CEOs went to school

First, let’s start with school rankings. There aren’t many big surprises here. Harvard and Stanford far outpace any other institutions on the CEO list. Each counts close to 150 known alum among chief executives of startups that raised $1 million or more over the past year.

MIT, University of Pennsylvania, and Columbia round out the top five. Ivy League schools and large research universities constitute most of the remaining institutions on our list of about twenty with a strong track record for graduating CEOs. The numbers are laid out in the chart below:

Traditional MBA popular with startup CEOs

Yes, Bill Gates and Mark Zuckerberg dropped out of Harvard. And Steve Jobs ditched college after a semester. But they are the exceptions in CEO-land.

The typical path for the leader of a venture-backed company is a bit more staid. Degrees from prestigious universities abound. And MBA degrees, particularly from top-ranked programs, are a pretty popular credential.

Top business schools enroll only a small percentage of students at their respective universities. However, these institutions produce a disproportionately large share of CEOs. Wharton School of Business degrees, for instance, accounted for the majority of CEO alumni from the University of Pennsylvania . Harvard Business School also graduated more than half of the Harvard-affiliated CEOs. And at Northwestern’s Kellogg School of Management, the share was nearly half.

CEO alumni background is really quite varied

While the educational backgrounds of startup CEOs do show a lot of overlap, there is also plenty of room for variance. About 3,000 U.S. startups and nearly 5,000 global startups with listed CEOs raised $1 million or more since last May. In both cases, those startups were largely led by people who didn’t attend a school on the list above.

Admittedly, the math for this is a bit fuzzy. A big chunk of CEO profiles in Crunchbase (probably more than a third) don’t include a university affiliation. Even taking this into account, however, it looks like more than half of the U.S. CEOs were not graduates of schools on the short list. Meanwhile, for non-U.S. CEOs, only a small number attended a school on the list.

So, with that, some words of inspiration for graduates: If your goal is to be a funded startup CEO, the surest path is probably to launch a startup. Degrees matter, but they’re not determinative.

News Source = techcrunch.com

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