We are suggesting that the Champaign County government sponsor an Entrepreneurial Visa Loan (EVL) program which will provide upfront temporary capital for foreign entrepreneurs looking to apply for the Entrepreneur Visa in Startup Act 2.0. The capital would be in the form of ten loans worth $25,000 each, awarded to the ten best project initiative proposals each year. This loan will be particularly valuable as it can count toward the $100,000 necessary to earn an Entrepreneur Visa.
The loan will be specifically designed to encourage these entrepreneurs to remain in Champaign County and utilizes a powerful incentive structure, building on the philosophy that entrepreneurs are motivated by opportunity rather than rules and restrictions. If the entrepreneur and the associated business choose to remain in the county, the entrepreneur would be exempt from any payments during the first year and could then proceed to pay off the loan interest-free over the next five years. However, should the entrepreneur decide to leave Champaign County, a high 7% interest rate will immediately be implemented, as is standard for small loans for small business ventures. If this decision occurs within the first year, the five-year payment plan would immediately go into effect. The EVL is contingent upon acquisition of the Entrepreneur Visa as well and would be considered null and void if the Entrepreneur Visa is not awarded.
Prospective applicants must meet three strict criteria in addition to those set forth in Startup Act 2.0. The first is a clear demonstration of technical feasibility with a working prototype and proof of ability to appropriate scale the manufacturing process. The second is a marketing plan with a well-defined value proposition and relevant market research that proves satisfactory demand. The third is a business plan with evidence of strong financial analysis accounting for all applicable variables, projected valuations and profitability, and a risk or sensitivity analysis for at least 5 years into the future. Of those that meet the criteria, ten proposals will be awarded the EVL annually.
It should be acknowledged that Champaign County does absorb some risk that the startup fails prior to fully repaying the loan or the entrepreneur is forced to leave the country at either the one- or three-year benchmark. While risk is inherent with any startup venture, Champaign County can help mitigate this risk by establishing a strong evaluation committee and utilizing the entrepreneurial networks at the University of Illinois to maximize the number of potentially successful applicants. However, the risk is well worth the reward. Under the relatively safe assumption that three startup have become quite successful within five years of launching the EVL program, Champaign County will have planted the seeds of a long-term, sustainable entrepreneurial community that will attract complimentary business and other entrepreneurial talent from around the United States. The organic growth of this community would occur exponentially as new ventures continue to source other ventures in a cyclic fashion. The growth of this community will undoubtedly create a long-term increase in tax revenues in the area. While the investment may recover its full value immediately, a long term entrepreneurial community can help redefine the region and fully capitalize on the incredible resources of the nearby University.