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Foreign student entrepreneurs

I am a foreign student and am starting a business. Then i learned that if I incorporate my company here in US, as the founder I can only get 10% of the equity at most, just because I am a foreigner. This is a concrete barrier for foreign startups.

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Idea#276

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  1. Comment
    brian

    Yeah, we're not trying to fund foreign nationals who don't really need funding.

    Heck, we don't even want to fund foreign nationals at all, why would we?

    It's NOT in our country's best, better, or even good interest. We need to fund our own people first, then fund somebody else when our own back yard is clean.

  2. Comment
    Carlisle Haworth

    @grassbiter, I have a different take than the previous poster, and support entrepreneurship in general. I had not heard the 10% equity rule and that would frustrate me as well. Are you incorporating it as an S Corp, C Corp, LLC? what structure? Maybe you can get a partner who is a citizen to incorporate in his or her name, and then take more of the equity that way?

  3. Comment
    milburnski

    I hadn't hear of this before either, but if it's true, it's really stupid. Immigrants have consistently been shown to rank at or near the top of all demographics for job creation. Rather than steal jobs from "hardworking Americans" they create jobs and lower unemployment rates all around them. And I for one would rather see you get your education here, start a business here, and build your life here and help us compete with the rest of the world than force you back to your native country where you will use your education to do the same thing and compete with us.

    Back to your original problem. For every dumb rule, there is a smart work-around. That's whey we have so many lawyers. My first response is take a bunch of debt against the business and keep your equity share low. If you don't know any citizens you trust, give the balance to a local university or charity. Write a Note that gives the senior creditor all sorts of management control and 90% of the economic upside. Banks do this every day, VCs and hedge funds even more so. They've already blazed a trail for you, just follow it.