Due to a data sorting error, I originally overstated the percentage of U.S. born cofounders in the Top 50 Venture Backed companies. This error has been corrected. See Footnote.
Companies "Without a Foreign Born Founder" have employment levels 26% higher than the Top 50 average employment levels.
Companies "Without a American Born Founder" have employment levels 25% lower than the Top 50 average employment levels.
Companies with foreign born founders/cofounders (23 of 50) are almost twice as likely to apply for H-1B temporary guestworker visas.
Stuart Anderson’s organization, the National Foundation for American Policy (NFAP), may be doing more harm to his cause than good. Whenever someone throws out a percentage and does not provide a divisor, you can be assured that they are hiding something.
This paper’s topic:
"Immigrant Founders and Key Personnel In America’s Top Venture-Funded Companies,"By: Stuart Anderson
The NFAP study states: "The research finds that 46 percent, or 23 out of 50, of the country’s top venture-funded companies had at least one immigrant founder. This illustrates the increasing importance and contributions of immigrants to the U.S. economy."
Mathematically, the NFAP statement makes no sense, how do you divide a variant number of founders by the number of companies? I was taught that you have to divide by "like" terms, cofounders and companies are not like terms. Curiously, the NFAP document has a Table with the names and birthplace of the foreign-born founders. However, after finding another source for the "Top 50" data, I find that the NFAP has removed the names of the U.S. born founders and eliminated the companies that did not have a foreign-born founder from the Table included in the NFAP Study.
After combining the two sources of data, I (also) found that 23 of the 50 companies selected did have one or more foreign-born founders/cofounders; however, 13 of those 23 companies also had one or more American born cofounders. Only 10 of the Top 50 companies did not have an American born cofounder.
Most of the Top 50 companies (36) are located in California, which has 34.9% population of foreign-born employed in the labor force, so the 31.9% foreign-born founders/cofounders (found in the table below) basically represents the population.
|Top 50 Venture Backed Companies|
|Foreign Born Founders||39||32.8%|
|American Born Founders||80||67.2%|
|With a Foreign Born Founder|
|Number of Companies||23||46.0%|
|Number of Employees||3,289||31.9%|
|*H-1B Work Visa Applications (LCA)||362||11.0%|
|Avg. Ranking (1 to 50)||23.09|
|**Avg. Year Founded||2004.9|
|Without a Foreign Born Founder|
|Number of Companies||27||54.0%|
|Number of Employees||7,025||68.1%|
|***H-1B Work Visa Applications (LCA)||445||6.3%|
|Avg. Ranking (1 to 50)||27.56|
|**Avg. Year Founded||2003.5|
|Without an American Born Founder|
|Number of Companies||10||20.0%|
|Number of Employees||1,295||12.6%|
|*H-1B Work Visa Applications (LCA)||154||11.9%|
|Avg. Ranking (1 to 50)||25.70|
|**Avg. Year Founded||2005.2|
** Avg. Year Founded is decimal
***Appia Inc., (with an employee roster of 51), applied for 214 of the 445 H-1B Work Visa Applications in "Without a Foreign Born Founder".
If Appia Inc. 51 employees and 445 H-1B applications are removed from the sample, the percent of H-1B applications would be 3.3% in the "Without a Foreign Born Founder" group of companies.
From the table above, I notice that the Top 50, Avg. Ranking for each group is similar, each segregated group is near the middle of the Top 50 Avg. Ranking. The two groups of companies with foreign born cofounders appear to have a slightly more viable ranking, but the foreign born founded/cofounded companies seriously under-perform in the" Number of Employees" category. Additionally, companies with foreign born founders and cofounders are almost twice as likely to apply for H-1B temporary guestworker visas.
The NFAP study trumpets that immigrants are crucial to employment growth. Conversely, the table above demonstrates that the "Without a Foreign Born Founder" group of companies employ 68% of the personnel while this group consists of only 54% of the Top 50 companies.
Key Positions Held By Foreign Born: The NFAP study also contains a table of key positions held by foreign-born employees, but here-again the NFAP does not include the universe of key positions. The NFAP uses the following statement to describe key positions:
Table 2: Immigrant Key Member of Management or Product Development Team in Top VC-Backed Companies
While it would be interesting to see if these companies have a preference for foreign-born employees, we would also have to take into consideration the percentage of employed foreign-born in each state’s labor force.
The following table examines the foreign born founder data in relation to location, and the prevalence of the population of foreign born employed within the specified states (from Census data).
|Company Location||Foreign Born||U.S. Born||Aggregate||Percent||*Census Employed||Number|
|CA||31||56||31 of 87||35.6%||34.9%||36|
|CO||0||1||0 of 1||0.0%||1|
|GA||1||0||1 of 1||100.0%||12.1%||1|
|IL||0||2||0 of 2||0.0%||1|
|IN||0||3||0 of 3||0.0%||1|
|MA||0||2||0 of 2||0.0%||1|
|NC||0||1||0 of 1||0.0%||1|
|NJ||3||0||3 of 3||100.0%||25.6%||1|
|NY||3||6||3 of 9||33.3%||27.0%||3|
|TX||0||7||0 of 7||0.0%||2|
|UT||0||2||0 of 2||0.0%||1|
|WA||1||0||1 of 1||100.0%||14.3%||1|
|Total||39||80||39 of 119||32.8%||27.6%||50|
In closing, the majority of the Top 50 Venture-Funded companies are located in states with extremely high populations of foreign-born in the labor force -- the data shows nothing statistically remarkable about foreign-born founders. Moreover, the benefit of employment growth in foreign born cofounded companies is muted by a substantially higher application rate for temporary foreign workers and below average employment levels. In fact, companies Without a Foreign Born Founder" have employment levels 26% higher than the Top 50 average, while companies "Without a American Born Founder" have employment levels 25% lower than the Top 50 average employment levels.
I originally used a single data table to contain the cofounder data and manually sorted the single table to select the desired values for the Average and Sum spreadsheet functions. I must have inadvertently sorted the table an additional time, which in turn provided incorrect values for the Average and Sum calculations.
The corrected error:
Ninety-two percent, or 46 out of 50, of the country’s top venture-funded companies had one or more American born founders.
This error has been corrected, and learning from my mistake, I de-normalized the single data table into three separate data tables, which can be sorted without affecting the Average and Sum calculations.
I’ve updated the tables above this section to reflect the correct values for each table. I apologize for any inconvenience this may have caused, and I want to ensure to everyone that I have the utmost respect for providing true and correct data regarding this important debate.
National Foundation for American Policy (NFAP)
"Immigrant Founders and Key Personnel In America’s Top Venture-Funded Companies,"
Wall Street Journal
Top 50 Venture-Funded Companies WSJ.com
(This source provided founder data omitted from tables presented by NFAP publication)
Foreign Born Employed in the Labor Force:
Employed Civilian Foreign-Born Labor Force by State: 2007
Appendix Table A.
H-1B LCA Application Data
|Rank||Name||Location||Industry||All Founders||Employees||Year Founded||Immigrant founders||H-1B LCA|
|1||Castlight Health Inc.||San Francisco||Health Care||Giovanni Colella, Todd Park||100||2008||Giovanni Colella (Italy)||4|
|2||Xirrus Inc.||Thousand Oaks, Calif.||Information Technology||Steven DeGennaro, Dirk Gates, Patrick Parker||170||2003||0|
|3||Xactly Corp.||San Jose, Calif.||Business and Financial Services||Christopher Cabrera, Satish Palvai||140||2005||Satish Palvai (India)||13|
|4||Recycle Rewards Inc.||New York||Business and Financial Services||Patrick FitzGerald, Ron Gonen||150||2004||5|
|5||ExteNet Systems Inc.||Lisle, Ill.||Information Technology||Ross Manire, Eric Lekacz||86||2002||2|
|6||Cyan Optics Inc.||Petaluma, Calif.||Information Technology||Michael Hatfield, Rick Johnston, Steve West, Eric Clelland||102||2006||Steve West (South Africa)||16|
|7||Aster Data Systems Inc.||San Carlos, Calif.||Information Technology||Tasso Argyros, Mayank Bawa, George Candea||102||2005||Tasso Argyros (Greece) Mayank Bawa (India)||55|
|8||Glam Media Inc.||Brisbane, Calif.||Consumer Services||Samir Arora, Rebecca Bogle Arora, Ernie Cicogna, Susan Kare, Dianna Mullins, Raj Narayan, Fernando Ruarte, Vic Zaud||300||2004||Samir Arora (India) Raj Narayan (India)||6|
|9||Carrier IQ Inc.||Mountain View, Calif.||Information Technology||Bruce Lacey, Steve Roskowski||75||2005||16|
|10||Imperva Inc.||Redwood Shores, Calif.||Information Technology||Mickey Boodaei, Shlomo Kramer, Amichai Shulman||350||2002||Mickey Boodaei (Israel) Shlomo Kramer (Israel) Amichai Shulman (Israel)||14|
|11||Vidyo Inc.||Hackensack, N.J.||Information Technology||Alex Eleftheriadis, Avery More, Ofer Shapiro||140||2005||Ofer Shapiro (Israel) Alex Eleftheriadis (Greece) Avery More (Israel)||22|
|12||Etsy Inc.||Brooklyn, N.Y.||Consumer Services||Robert Kalin, Chris Maguire, Haim Schoppik, Jared Tarbell||185||2005||Haim Schoppik (Switzerland)||1|
|13||RGB Networks Inc.||Sunnyvale, Calif.||Information Technology||Edward Krause, Peter Monta, Adam Tom||175||2003||Edward Krause (Canada)||37|
|14||IronKey Inc.||Sunnyvale, Calif.||Information Technology||David Jevans||100||2005||8|
|15||Appia Inc.||Durham, N.C.||Information Technology||Jud Bowman||51||2008||214|
|16||The Active Network Inc.||San Diego||Business and Financial Services||James Woodman||2,500||1998||58|
|17||Nimble Storage Inc.||San Jose, Calif.||Information Technology||Umesh Maheshwari, Varun Mehta||55||2008||Umesh Maheshwari (India) Varun Mehta (India)||7|
|18||PatientSafe Solutions Inc.||San Diego||Health Care||Kim Rubin, David Swenson||80||2002||0|
|19||Glaukos Corp.||Laguna Hills, Calif.||Health Care||Olav Bergheim, Richard Hill, Morteza Gharib||40||2001||Olav Bergheim (Norway) Morteza Gharib (Iran)||0|
|20||Fusion-io Inc.||Salt Lake City||Information Technology||David Flynn, Rick White||370||2006||4|
|21||Achaogen Inc.||South San Francisco, Calif.||Health Care||Nathaniel David, J. Kevin Judice, Floyd Romesberg, Peter Schultz||64||2004||3|
|22||NeuroPace Inc.||Mountain View, Calif.||Health Care||Robert Fischell, David Fischell||90||1997||4|
|23||Xoom Corp.||San Francisco||Business and Financial Services||Alan Braverman, Kevin Hartz||70||2001||19|
|24||Workday Inc.||Pleasanton, Calif.||Business and Financial Services||Aneel Bhusri, David Duffield||650||2005||21|
|25||SpiderCloud Wireless Inc.||Santa Clara, Calif.||Information Technology||Peter Wexler||60||2008||20|
|26||Jive Software Inc.||Palo Alto, Calif.||Information Technology||Bill Lynch, Matt Tucker||336||2001||6|
|27||Federated Media Publishing||San Francisco||Consumer Services||John Batelle||165||2005||2|
|28||Boku Inc.||San Francisco||Business and Financial Services||Mark Britto, Ron Hirson, Erich Ringewald||65||2009||Mark Britto (Singapore) Ron Hirson (South Africa)||7|
|29||Zoosk Inc.||San Francisco||Consumer Services||Shayan Zadeh, Alexander Mehr||80||2007||Shayan Zadeh (Iran) Alexander Mehr (Iran)||8|
|30||EndoGastric Solutions Inc.||Redmond, Wash.||Health Care||Stefan Kraemer||120||2003||Stefan Kraemer (Germany)||0|
|31||Chegg Inc.||Santa Clara, Calif.||Consumer Services||Aayush Phumbhra, Osman Rashid||150||2007||Aayush Phumbhra (India) Osman Rashid (U.K.)||34|
|32||Everyday Health Inc.||New York||Consumer Services||Michael Keriakos, Benjamin Wolin||400||2002||Michael Keriakos (Canada)||26|
|33||Xsigo Systems Inc.||San Jose, Calif.||Business and Financial Services||R.K. Anand, Ashok Krishnamurthi, S.K. Vinod||110||2004||R.K. Anand (India) Ashok Krishnamurthi (India) S.K. Vinod (India)||36|
|34||Soasta Inc.||Mountain View, Calif.||Information Technology||Kenneth Gardner, Tom Lounibos||100||2006||3|
|35||Rally Software Development Corp.||Boulder, Colo.||Information Technology||Ryan Martens||241||2002||2|
|36||Prosper Marketplace Inc.||San Francisco||Business and Financial Services||Christian Larsen, John Witchel||38||2005||11|
|37||Pivot3 Inc.||Houston||Information Technology||Ryan Callison, Lee Caswell, Bill Galloway, Alan Skidmore||78||2003||3|
|38||Suniva Inc.||Norcross, Ga.||Energy and Utilities||Ajeet Rohatgi||190||2007||Ajeet Rohatgi (India)||4|
|39||Veracyte Inc.||South San Francisco, Calif.||Health Care||Bonnie Anderson||40||2008||0|
|40||ExactTarget Inc.||Indianapolis||Business and Financial Services||Chris Baggott, Scott Dorsey, Peter McCormick||850||2000||14|
|41||OncoMed Pharmaceuticals Inc.||Redwood City, Calif.||Health Care||Michael Clarke, Max Wicha||76||2004||5|
|42||ExaGrid Systems Inc.||Westborough, Mass.||Information Technology||James Pownell, Dave Therrien||145||2002||1|
|43||SeeSaw Networks Inc.||San Francisco||Business and Financial Services||Peter Bowen, Jeff Dickey, Rocky Gunderson, Scott Hines, Monte Zweben||20||2006||0|
|44||Silver Peak Systems Inc.||Santa Clara, Calif.||Information Technology||David Hughes||150||2004||David Hughes (New Zealand)||21|
|45||Zilliant Inc.||Austin, Texas||Information Technology||Alex Chien, Deborah Vollmer Dahlke, Peter Zandan||120||1999||25|
|46||Yammer Inc.||San Francisco||Business and Financial Services||Adam Pisoni, David Sacks||100||2008||5|
|47||Bivio Networks Inc.||Pleasanton, Calif.||Information Technology||Junaid Islam, Jeff Payne, Homayoun Valizadeh||60||2000||Junaid Islam (Canada) Homayoun Valizadeh (Australia)||6|
|48||TxVia Inc.||New York||Business and Financial Services||Carl Ansley, Colin Fleming, Aaron Tay||150||2006||Aaron Tay (New Zealand) Colin Fleming (New Zealand)||27|
|49||Service-now.com Inc.||Del Mar, Calif.||Information Technology||Fred Luddy||300||2003||2|
|50||Aprius Inc.||Sunnyvale, Calif.||Information Technology||Marc Epitaux, Peter Kirkpatrick, Jean-Marc Verdiell||25||2007||Marc Epitaux (Switzerland) Jean-Marc Verdiell (France)||10|