^{Originally published on Economic Immigration AKA The Prisoner's Dilemma}

Eighty-two percent, or 41 out of 50, of the country’s top venture-funded companies had one or more American born founders.  No, I didn’t make up the statistic, I found the data and reversed the spin that the pro-immigration faction is trying to promote.

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 article’s topic: "Immigrant Founders and Key Personnel In America’s Top Venture-Funded Companies,", By: Stuart Anderson.   Anderson claims:

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 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 their paper being touted as fact by politicians.

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; however, 19 of those 23 companies also had one or more American born founders. Only 4 of the 50 companies in the study did not have an American born founder.

Most of the selected companies are located in California, which has 34.9% population of foreign-born employed in the labor force, so the 33% foreign-born founders (found in the table below) basically represents the population.

* Avg. Year Founded is decimal

The NFAP also has a list of key positions held by foreign-born employees, but again does not include the universe of key positions. One can claim an employee or founder is in a key position, but if there are 15 employees with the same title, or more importantly key players with different titles, more responsible for the success of the business, that definition of key position can become meaningless. The NFAP paper 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. Thirty-five of the top fifty companies are located in California and another five are located in New York. The other ten companies are located in one of the remaining states listed in the Table below.

In closing, the majority of the Top 50 companies (80%) are located in states with extremely high populations of foreign-born in the labor force -- the data shows nothing remarkable about foreign-born founders.

Source Data:

National Foundation for American Policy (NFAP)
"Immigrant Founders and Key Personnel In America’s Top Venture-Funded Companies,"
http://www.nfap.com/pdf/NFAPPolicyBriefImmigrantFoundersandKeyPersonnelinAmericasTopVentureFundedCompanies.pdf

Wall Street Journal
Top 50 Venture-Funded Companies WSJ.com
(Founder data omitted from tables presented by NFAP)
http://online.wsj.com/article/SB10001424052748704132204576190644237905576.html

Foreign Born Employed in the Labor Force:

Employed Civilian Foreign-Born Labor Force by State: 2007
Appendix Table A.

www.census.gov/prod/2008pubs/acs-09.pdf

Appendix:

Data