Immigrant entrepreneurs create jobs and innovations that benefit the United States. New research shows how vital immigrants have become in founding America’s most valuable companies.
“Immigrants have started more than half (319 of 582, or 55%) of America’s startup companies valued at $1 billion or more,” according to a new National Foundation for American Policy (NFAP) analysis. (I authored the study.) “Moreover, nearly two-thirds (64%) of U.S. billion-dollar companies (unicorns) were founded or cofounded by immigrants or the children of immigrants. Almost 80% of America’s unicorn companies (privately-held, billion-dollar companies) have an immigrant founder or an immigrant in a key leadership role, such as CEO or vice president of engineering.”
The research is an update of NFAP studies in 2016 and 2018. However, due to the growth in billion-dollar companies, the 2022 study involved gathering and verifying information on the founders of more than 580 unicorn companies (tracked by CB Insights). “Unicorns” are privately held companies (i.e., not traded on the stock market), valued at $1 billion or more and have received venture capital financing.
According to the analysis, 58% of immigrant-founded billion-dollar companies had only an immigrant or multiple immigrant founders (i.e., no native-born founders). “Overall, 86% of the immigrant-founded billion-dollar companies had solely an immigrant founder or immigrant founders or a majority of founders who were immigrants or an even number of immigrant and native-born founders; only 14% had a majority of native-born founders,” study found. “Given that each cofounder contributes to a startup company’s success, it appears likely that none of the billion-dollar companies with at least one immigrant founder would exist or have been created in the United States if the foreign-born founder had not been allowed to come to America.”
Tomas Gorny grew up in Poland under communism. Post-communism, Gorny saved enough money from small ventures to come to Los Angeles as a 20-year-old. He spoke little English. He worked at a company, where he had partial ownership, and assembled computers and negotiated prices. He earned extra money by working odd jobs, including washing dishes and carpet cleaning. In 2001, Gorny cofounded the technology company IPOWER with Tracy Conrad and sold the company 10 years later for $1 billion to Warburg and Goldman Sachs. In 2006, Gorny cofounded Nextiva with Conrad. The company provides a platform for business phone, videoconferencing and collaboration and employs more than 1,600 people. Gorny is CEO of Nextiva, which is valued at $2.7 billion.
Many of the immigrant founders of billion-dollar companies are remarkable people who any American should be happy to have in the United States. Guillermo Rauch, an immigrant from Argentina, founded Vercel, a cloud platform for web developers. The company has 400 employees and is valued at $2.5 billion. Rauch taught himself web development—at age 11— and learned English by “reading software manuals.”
“As a kid, I was fascinated by the idea of being able to create and innovate alongside a global community of developers right from my hometown outside of Buenos Aires, Argentina,” said Rauch in an interview. “My own experiences fueled my desire to solve the challenges I faced while using the web. Immigrating to the U.S. gave me the opportunity to start Vercel to help build a more interesting, intuitive, and open internet by empowering developers to create the moment inspiration strikes.”
Many innovations are only realized via entrepreneurship. Think back to the creations of Nikolai Tesla and Alexander Graham Bell—both immigrants who founded companies and invented useful products. The study notes, “The best ideas will never be applied or perfected without people willing to take a chance on those ideas, and billion-dollar companies are among America’s most innovative.”
There is no startup visa in U.S. law. Rep. Zoe Lofgren’s (D-CA) bill to create one was part of the COMPETES Act that passed the House of Representatives in February 2022. Since immigrant entrepreneurs cannot gain permanent residence by starting a business, the immigrant founders of billion-dollar companies typically gain their green cards as refugees or family-sponsored or employer-sponsored immigrants. Several came to America as children with their parents.
One-quarter (143 of 582, or 25%) of U.S. billion-dollar startup companies have a founder who came to America as an international student. International students generally must gain H-1B status and (or) an employment-based green card to stay in the United States after graduation.
Two more findings of note from the research:
– “The collective value of the over 300 immigrant-founded U.S. companies is $1.2 trillion, which is more than the value of all the companies listed on the main stock markets of many countries, including Argentina, Colombia, Peru, Portugal, Ireland, Russia and Mexico.
– “The research finds that the privately held U.S. billion-dollar startup companies with immigrant founders have created an average of 859 jobs per company, the majority in the United States.”
Americans should be pleased that so many people have come to the United States and succeeded armed only with ambition, a keen mind and a desire to work hard. “Immigrant entrepreneurship is about overcoming obstacles and achieving dreams,” the study concludes, “showing that America benefits when it opens its doors to people seeking opportunity in a new land.”