Foreign startups in Silicon Valley still a rarity

Asian programmers may be a common sight in Silicon Valley, but foreign entrepreneurs are practically a rarity, says Valley-based accelerator.

Asian programmers may be a common sight in Silicon Valley, but foreign entrepreneurs are practically a rarity, according to Ben Levy, a partner at BootstrapLabs.

"If you start digging into how many of the foreign entrepreneurs that go through them manage to stay in Silicon Valley, the number might be close to zero or in the single digit percentage," he said.

Foreign startups in Silicon Valley still a rarity, according to BootstrapLabs.

Levy, who is based in the Bay Area, said foreign entrepreneurs who try to set up shop in the Valley—even those who manage to go through prestigious programs with Y Combinator or 500 Startups—almost never manage to stay on.

Of course, Levy was speaking from the perspective of BootstrapLabs, whose raison d'etre is to bring foreign startups to the Valley in the first place. But his point is supported by several high-profile tech CEOs who have been pushing for immigration reform in the U.S., in order to attract more tech-savvy workers to the country.

In March, over 100 tech executives including Facebook CEO Mark Zuckerberg, HP CEO Meg Whitman, Intel CEO Paul Otellini and Yahoo CEO Marissa Mayer, signed a letter urging President Obama to relax immigration laws especially for highly-skilled workers into the U.S.

Levy said the missing piece for many startups wanting to stay is the need to have sufficient funding while they build relationships, without having to start out from ground zero "begging for money" already.

While many may have landed in Silicon Valley with some seed funding, follow-on funding can be a challenge for those new to the scene, he said.

Founded in 2008, BootstrapLabs has been active in relocating startups to the Valley, including Zerply and Witsbits from Sweden, and Budapest's Prezi, for example.

Recently however, it's started to plant roots in Asia, with partnerships with accelerators in South Korea and Malaysia.

Earlier this week, it announced a tie-up with Seoul-based Coolidge Corner Investment (CCVC), to set up a program in Seoul for Korean startups. CCVC manages a US$22 million fund.

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Startups will get an initial US$100,000 and go through a six-month program in Seoul.

Levy said that for a start, BootstrapLabs will pick about three to six companies in the first six months of 2014. It plans to work with each for about 12 months and provide more capital over time, in order to allow them some staying power in the Valley, he said.

BootstrapLabs typically takes some equity stake in its portfolio companies comparable to other accelerators, which is around 6 percent to 7 percent.

Back in May, it also set up a partnership with Malaysian outfit MAD incubator back in May, to cover the Southeast Asian market.

Singapore startups may be at a slight advantage compared with regional peers, when it comes to setting up in Silicon Valley. When I spoke to Semantics3's co-founder Sivamani Varun earlier this month, the Singaporean entrepreneur noted that it's been a little easier for him to get a visa and stay in the US.. to grow Semantics3, because of the H1B1 visa set up under the U.S.-Singapore free trade agreement.

The visa is not subjected to the same restrictions as the broader H1B visa for most foreign workers into the States, and has allowed Varun to avoid some of the waiting time and regulatory hoops after Semantics3 finished its term with Y Combinator last year.