Dear Sophie: O-1A vs International Entrepreneur Parole

Question

Dear Sophie,

Are there any advantages to International Entrepreneur Parole over an O-1 visa? IEP seems to require $250k in institutional backing – so getting an O-1A doesn’t seem like a huge reach from there. I feel like the O-1A has many more advantages as well. I’d love to hear your thoughts on this.

— Eager Entrepreneur

Answer

Dear Eager,

What a great question! For some context before I dive into your question, I’d like to share some insight from my recent chat with Danielle D’Agostaro, a principal partner at WV Ventures, during which she discussed some of the biggest changes she’s seen in the VC world. Even though “most VCs now no longer care where a startup’s founding team is,” having a startup visa is important to give founders an easy way to remain in the U.S. to create jobs and innovate, D’Agostaro said. 

International Entrepreneur Parole (IEP) is the next best thing to a startup visa; its qualifying requirements are similar to the startup visa that I personally helped draft for Rep. Zoe Lofgren! This newly proposed startup visa is currently under consideration for inclusion in congressional legislation to increase U.S. global competitiveness. Until a new startup visa is approved, here are the main advantages—and disadvantages—of IEP and how it stacks up against the O-1A visa for extraordinary ability:

Qualifying for IEP and O-1A

You mentioned one of the criteria to qualify for IEP is to receive at least $250,000 from investors. That figure increased to $264,147 at the start of the new federal fiscal year on Oct. 1, 2021, and is scheduled to adjust again in 2024. For your planning, the minimum investment and revenue amounts under IEP are adjusted according to the Consumer Price Index for All Urban Consumers – these adjustments occur every three years. Here are the criteria you would need to meet to qualify for IEP:

1. Your startup is less than five years old.

2. You own at least 10%.

3. Your role is central to the startup and you will play an active role.

4. Your startup has received at least $105,659 in government awards or grants or at least $264,147 from qualified U.S. investors.

You’re correct: securing $265k from VCs (or $106k in government grants) could also meet the O-1A criterion of winning a nationally or internationally recognized award for excellence in your field. However, you would still need to meet at least two additional criteria to demonstrate your extraordinary ability for an O-1A. The additional criteria for the O-1A require significant accomplishments, which may take years to achieve, such as:

1. Invitation-only membership in associations or business clubs in your field due to your outstanding abilities or achievements, such as membership as a fellow of the Institute of Electrical and Electronic Engineers (IEEE) or the Association for the Advancement of Artificial Intelligence (AAAI), or acceptance into an accelerator or incubator, such as Y Combinator (but not YC Startup School) or 500 Startups.

2. Articles have been written about you or your work and are published in professional publications, major trade publications, or major media. Newsletters, press releases that were never published in a major publication, and student-run university publications usually don’t count.

3. You have judged the work of others, either individually or on a panel, beyond a university-level competition, such as serving as a judge for a hackathon or other engineering competition or making hiring decisions at a tech company.

 

Qualifying investments

Under IEP, only funding from ‘qualified’ U.S. investors counts toward the $264,147 minimum. Many VCs receive funding from international LPs while US partners manage and control the fund.  Here U.S. Citizenship and Immigration Services (USCIS) is looking for organizations located in the US that are majority owned and controlled, directly and indirectly, by US citizens or green card holders.  It is not required to show that 50% of the capital is sourced from U.S. LPs.  

Meanwhile, all investments are considered awards under the O-1A visa regardless of whether they come from the U.S. or foreign investors.

 

Spouse/dependent parole eligibility

If an entrepreneur is approved for IEP, then his/her spouse and dependent children (unmarried and under 21 years) are also eligible for parole during that same period. Spouses are eligible to file for a work permit once they arrive in the U.S., which will allow them to get a job or start their own business.

In contrast, the dependent spouse of an O-1A visa holder is not eligible for a work permit and is therefore ineligible to work unless he/she finds an employer willing to sponsor him/her for a work visa.

 

Processing times vary significantly 

Based on the IEP cases my firm has filed, USCIS is taking eight months to a year to issue a decision on IEP applications, and they are issuing Requests for Evidence (RFEs). Premium processing, which guarantees (for a fee) that USCIS will either make a decision on a case or issue a Request for Evidence (RFE) within 15 days, is currently not available for IEP. 

Moreover, while USCIS recently improved processing time estimates on its Case Processing Times page, the page still does not offer an estimate on processing time for Form I-941 (Application for Entrepreneur Parole). In addition, there is no clear procedure for applicants to follow up with USCIS on IEP cases.

In contrast, premium processing is available for O-1A visas. In fact, the O-1A visa is one of the quickest work visas to obtain.

 

Some final considerations

If USCIS approves your IEP application, you will receive a parole document that is valid for 30 months, supports multiple entries, and can be extended once for another 30 months if you and your startup continue to meet the extension criteria:

1. Own at least a 5% ownership stake in the start-up.

2. Maintain a central and active role in the start-up.

3. Show that during the initial IEP period, the start-up either:

Received at least $528,293 in qualifying investments, grants, or awards.

Created at least five qualifying jobs.

Reached at least $528,293 in annual revenue in the U.S. and averaged 20% annual revenue growth.

Also an important detail – USCIS approval alone does not get you parole. A U.S. Customs and Border Patrol (CBP) officer at an airport or other U.S. port of entry will have the final say on whether you are granted parole (a temporary stay in the U.S.)! That means if you are in the U.S., you must first leave the U.S. and then show your parole documents to the CBP officer upon reentering the U.S. If you are returning to the U.S. via airplane or boat, you will need to go to a U.S. embassy or consulate to obtain a boarding foil. Also known as a travel foil, it will enable you to board an airplane or boat since you won’t have a visa stamp in your passport with IEP. You will have to repeat this process for an extension. In our estimation, quite a convoluted process!

The IEP process is less convenient than filing for a change of status to an O-1A visa if you’re currently in the U.S. Moreover, IEP allows for a maximum stay of five years. There is no limit on the number of times an O-1A can be extended as long as the conditions under which it was initially granted remain in place.

For most startup founders, the O-1A offers more advantages than the IEP, if you can qualify.  And the time you spend waiting for IEP could be used instead to gain the qualifications for an O-1A.

I steadfastly work behind the scenes to help make improvements to the IEP process and to push for the startup visa. I hope to share some good news soon – that a new startup visa has passed. 

In the meantime, you can support our efforts to enlist change! If your startup is in one of the 16 states I mentioned in this previous Dear Sophie column, write a letter to your senator telling him/her why creating a startup visa is vital to innovation and job creation in the U.S.

All my best for your immigration and entrepreneurial success!

— Sophie

Learn more about Alcorn Immigration Law here 

Contact Alcorn Immigration Law here

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