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5 Things Investors Need to Know About the International Entrepreneur Program The new entrepreneur program (aka 'startup visa') opens up new opportunities for American investors.

By Tahmina Watson

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

Foreign-born startup founders who have financial backing from U.S. investors finally have an immigration pathway into the U.S. The Biden administration restored the Obama-era program in May, which is now available as an immigration option. There are several requirements to the program, but one of the central requirements of the program relies on investors, who play a crucial role in the overall success of both the program and its applicants.

The Department of Homeland Security (DHS), the agency that will adjudicate these cases, must have a way to assess the viability of the startup and that assessment will be made through the demonstrable business acumen of the investors. Here's what you need to know:

1. The investors must be American

A "qualified investor" can be a venture capital firm, an angel investor or an accelerator. If the investor is a venture capital firm or an accelerator, the corporate structure of those entities must be controlled by U.S. citizens or legal permanent residents. The same applies if the investor is an individual, such as an angel investor.

Related: International Entrepreneurs Now Have an Immigration Pathway to the U.S.

2. The entity operating the investment fund must be in the U.S.

The investor organizations must be located in the U.S. This is because the DHS wants reliable records and it wants to ensure there are efficient ways to screen for fraud, and "evaluate more rapidly, precisely, and effectively whether the investors have an established track record." For evidence to demonstrate the location, you will have to provide entity incorporation documents, licenses and more.

3. The investors must demonstrate past success

The application process requires that the qualified investor must have made similar investments in the past. First, there is a timeline. The prior investments must have been made in the past five years. Older investments will not satisfy the requirements.

The investor will also have to prove that total past investments were at least $600,000. Additionally, at least two of the companies that benefited from those investments must have generated at least $500,000 in revenue with an average growth of 20% or created at least five full-time jobs.

Clearly, these requirements will be paper-heavy and require the investor to review their portfolios carefully and gather the necessary documents for the right success stories to demonstrate.

4. Investments need not be cash only

The application process will follow the standard practices in the startup and investment world. As such, investments do not need to be cash only. The program allows investments to be made in other methods commonly used in financing transactions. Convertible notes, which are short-term debt financing methods, are common in the initial funding of startups, for example.

Related: Why Employees Are an Entrepreneur's Best Investment

5. This is an excellent opportunity for investors

Many U.S. investors invest their funds outside the U.S. There are several reasons for that. One reason includes having access to those entrepreneurs who are making groundbreaking discoveries outside the United States. In addition, there are often foreign-born founders in the U.S. who often don't have an appropriate visa to remain here, so any investment in them is a risk.

The International Entrepreneur program expands the horizon of possibilities for U.S. investors, allowing them to participate in innovative new opportunities — some of them breaking ground in ways they hadn't been able to before. And with their financial backing, promising entrepreneurs can now enter or remain in the U.S. to work on that next big idea. It is a win-win.

While Congress works on a Startup Visa bill, the International Entrepreneur Program provides a welcome stopgap. It will help the flow of capital funds, generate new startups, create opportunities to nurture innovative ideas and help the U.S. economy grow with new jobs as we slowly ease our way out of this pandemic.

Related: How to Figure Out If Your Employee Is Worth the Investment

Tahmina Watson

Entrepreneur Leadership Network® Contributor

Immigration Lawyer

Tahmina Watson is an award-winning attorney and the founder of Watson Immigration Law in Seattle, where she practices U.S. immigration law focusing on business and investment immigration.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

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