Fund started by 2 Indian Americans.
By The American Bazaar Staff
WASHINGTON, DC: Two Indian Americans, Nitin Pachisia and Manan Mehta, have started a unique fund to help wannabe and small entrepreneurs constrained by visa and financial issues, establish a startup in Silicon Valley.
The the selected entrepreneurs would get sponsored with H-1B visas and get paid for their work as employees of their own company, courtesy of the $3.5 million fund called Unshackled.
The idea is to nurture wannabe entrepreneurs who are also held back by H-1B visa rules, and cannot start their own business, or graduates on F-1 visas who might be forced to leave the country if they fail to get sponsored for a work visa. Or it could be someone with a brilliant idea, but burdened by student loans or family responsibilities, and not able to start a business.
The most important criteria for the fund: a great business idea that will in the long run turn a startup into a venture capital success story.
Once a business idea is approved, the founder(s) would be sponsored for an H-1B visa, if required, and the business would be set up in Silicon Valley. Or alternately, founders can transfer their visa to Unshackled and they will be offered cowering space.
The founder(s) and other employees who would subsequently be hired would be put on payroll through the fund, and also given benefits, like health insurance. This would continue till the company matures enough to raise more capital and expand.
The angel fund is looking to work with about 25 baby companies–but if it meets even part of its founders’ ambitious mission, Unshackled will move the needle on the types of people who believe they can build the next big tech company of the future, reported Forbes.
If things don’t work out, the entrepreneur can buy back their equity in the company, which will typically range from about $125,000 to $200,000 at an implied valuation of between $1.5 million and $2 million.
Unshackled technically can buy equity at $80-$120K, and buying back is something that will be considered down the road, but not for what is invested in payroll of $125-$200K.
The salaries that founders draw will be “enough to live on” in the Bay Area, Pachisia says, but not healthy enough that a founder will feel disincentivized from pushing toward a bigger paycheck down the road, according to Forbes.
Mehta told VentureBeat in an interview that the plan is for these startups, which will be very young, to stay under Unshackled’s umbrella for roughly six to 12 months until they get to a stage at which they have a product, early customers, and can go on and raise a seed round. Unshackled is essentially providing that early “friends and family” funding.
Like other early-stage funds, Unshackled plans to connect its founders to a large network of other investors and entrepreneurs. Limited partners backing the fund include First Round Capital, 500 Startups, Foundry Group’s Brad Feld, Formation 8′s Joe Lonsdale, AngelList founder Naval Ravikant and a host of others funds and founders from Laurene Powell Jobs’ Emerson Collective to Yahoo cofounder Jerry Yang, Forbes reported.
“With the capability and capacity of this talent pool, there’s eagerness to help,” says Mehta. His cofounder Pachisia insists that Unshackled isn’t just name-grabbing with its investors. “They don’t look at this as a passive investment, it’s a real extension of what they’re doing.”
Both founders benefited themselves from successful careers in the startup community made possible through immigration. A Delhi University grad, Pachisia worked for years at Deloitte as he made his way to California. Mehta’s father came to Silicon Valley on a green card in the 1970s and became an angel investor himself.
“We’re funded as a fund but we operate as a tech startup,” Mehta said in an interview with VentureBeat.
(This story was revised on 11/21/2014)