Unshackled, a new $3.5 million fund, has a plan to help entrepreneurs who have great ideas but who need help securing work visas so they can remain in the U.S. to work on them.
In addition to funding, Unshackled will sponsor these entrepreneurs’ visa applications, so they can leave their current employer — or graduate from college — without being deported.
Though Unshackled cofounders Manan Mehta and Nitin Pachisia come from different backgrounds (Mehta was born in the U.S., Pachisia in India), both have encountered many entrepreneurs unable to afford to leave their current jobs or situations to pursue their ideas because of immigration or financial limitations. Employer-sponsored visas (known as H1-B visas) are only valid as long as the person is working for the sponsoring company; leaving to start a company means losing the visa, unless the new employer can sponsor the visa. Leaving would also mean no more employer benefits, and so on.
So that’s where Unshackled comes in. Under the fund’s model, these entrepreneurs become employees of Unshackled, which then takes over sponsoring their visas (Unshackled only invests if they already have authorization to work in the U.S.). Unshackled also provides benefits and disburses the startup’s funding through payroll for them and their employees. Unshackled takes from 3 to 12 percent equity in return, depending on the company.
“We’re funded as a fund but we operate as a tech startup,” Mehta said in an interview with VentureBeat.
He added that the plan is for these startups, which will be very young, to stay under Unshackled’s umbrella for roughly six to 12 months until they get to a stage at which they have a product, early customers, and can go on and raise a seed round. Unshackled is essentially providing that early “friends and family” funding.
The fund’s limited partners include tech venture capital firms such as First Round Capital, 500 Startups, and Jerry Yang’s AME Cloud Ventures, as well as individual venture capitalists and investors such as Naval Ravikant, Brad Feld, and Joe Lonsdale. As a result, the startups will have access to a wide network of advisors, investors, accelerator programs, and more.
It should be noted that Unshackled isn’t only for entrepreneurs in need of visa sponsorship. Mehta and Pachisia are open to entrepreneurs in any circumstances with financial challenges keeping them from focusing full-time on their startups, they told me.
Unshackled is also pretty industry-agnostic in terms of the startups it will invest in, except for special areas such as pharmaceuticals due to its high research and development costs.
Unshackled and U.S. immigration
Despite Unshackled’s broadly inclusive approach, the challenges of immigration and entrepreneurship in the U.S. are at the core of it. And Unshackled’s founders are far from the first or only members of the tech industry to bring up the issues.
As Vivek Wadhwa argued two years ago, the Obama administration has had ample opportunity to help bring down some of these barriers, such as with the STEM Jobs Act, which would have made it easier for foreign students earning graduate degrees in math and science to get green cards. Obama opposed the legislation because of a provision that would eliminate the “diversity lottery” that provides 55,000 visas to randomly selected applicants from certain parts of the world, which it said was not in line with its goals of comprehensive immigration reform. The legislation did however provide for the reunification of families of foreign workers who are in the U.S. legally.
The Startup Visa is another attempt at helping foreign entrepreneurs set up shop in the U.S. The proposed legislation, formally known as the Startup Visa Act of 2013, could grant temporary-to-permanent visas to foreign entrepreneurs with U.S.-based investors willing to sponsor them, H-1B holders or STEM college graduates with investor commitments, or startups generating a certain amount from sales in the U.S.
While this legislation is still awaiting its fate, Unshackled could help entrepreneurs in similar circumstances by providing them with what these laws are promising, but within the confines of what our current laws allow for.
“We’re not fund managers, we’re entrepreneurs. It just so happens that the way to solve this problem was through a fund,” Mehta said of the duo’s approach.
Though they haven’t made any investments yet, Mehta and Pachisia plan to help 20 to 25 such startups over the next two years.
Disclosure: Unshackled investors Pankaj Shah, and Formation 8’s Brett Cummings and Joe Lonsdale, are also investors in VentureBeat.
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