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Why startups might not be the best option for international students

interstride logo by Interstride
October 18, 2022

Between December 2020 and December 2021, the number of new business applications in the United States grew by almost 21 percent. This surge in startups is on pace to break records, and it marks the end of a rather stagnant period in American entrepreneurism that began after the 2008 recession. Overall, this is great news for the country. But what does it mean for international students?

A rising tide lifts all ships, and certainly international students can feel confident knowing that they are about to enter the workforce in a time of opportunity. Nonetheless, international students might also want to think twice before they make startups a part of their job search strategy. Simply put, wagering your future on a startup is inherently riskier than going with an established company. 

While domestic students might have the resources and advantages that allow them to accept that risk, international students don’t. 

1. Startups have limited experience with hiring and sponsoring

As graduation approaches and you are beginning your job search, you need to focus your time and energy on companies that are most likely to hire you. Your immigration status is going to force you to think more strategically than a domestic student has to. That’s because some employers might be uncertain about your immigration status, while others may not bat an eye. 

In general, startups have limited experience with hiring and sponsoring foreign workers. As such, they are more likely to hire domestic employees. Even if you are lucky enough to find a startup willing to sponsor you, the road might still be rocky. A lot of startups do not have human resources departments dedicated to helping you deal with the US government. If you run into problems or barriers, you may be on your own. 

Large companies, on the other hand, are used to sponsoring foreign workers. Not only are they more likely to consider you for a job, but they also have processes in place to make the transition to employment as easy as possible. 

2. No international offices if H-1B is denied

While it is possible to work in the US for several years on an Optional Practical Training visa, you will eventually need either an H-1B Visa or a green card. H-1B denial rates in recent years, though, have been as high as 24 percent. 

If you find employment and your H-1B is denied, you can request that your employer temporarily relocate you to an international office. After completing a year abroad, you can return to the US in an L visa category. Many companies will offer this option to candidates well in advance, knowing the odds of the H-1B lottery. 

A startup or a company with no international offices cannot provide this option.

3. Startups have high failure rates

When a company applies to sponsor an employee on H-1B status, it must prove to the US Citizenship and Immigration Services that it is stable. Assurances, though, are rarely certain. And, sometimes those companies fail anyways, leaving foreign workers confused and concerned about their immigration status in the US. 

Startups are especially vulnerable to going under. According to data from the US Bureau of Labor Statistics, about 20 percent of US small businesses fail within the first year. By the end of their fifth year, roughly 50 percent have faltered. After 10 years, only around a third of businesses have survived.

When a business fails, or when a sponsored employee is laid off, that person has 60 days to find another job and file a change of employer petition. 

4. A strategy that works

The best strategy for finding long-term employment as an international student is to target companies with the right track record. 

Fortunately, the Interstride platform offers tools that do just that. 

  • The Jobs portal allows you to apply filters to your search to find current opportunities by visa type, experience level, industry, with employers that sponsor international students, and more.
  • The US Visa Insights page allows you to proactively identify companies that have historically sponsored international candidates. 

International students can develop a list of target companies and reach out to alumni and other professionals who work there through Interstride or LinkedIn. Ultimately, your future is up to you. But take the time to evaluate risk, employ a data-driven strategy, and make a thoughtful decision before you go job hunting in the startup sector.