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What are the ramifications of taking, say, Chinese investment under the T1 Visa programme?

I received an email from my current investors this morning asking if we are interested in pursuing T1 Visa investment. Here's the relevant part of the text.

"As some of you may already, we are now working to bring you opportunities for investment from overseas investors (T1 Entrepreneur). These investors bring a minimum of ?200,000 into the company, along with the relevant skills, qualifications, experience, and network to your specific industry. For the investor, they receive equity into an exciting new business, and a visa to work in your startup for the next 3-5 years."

I did a bit of research into the T1 programme this morning and it seems that, if we decide to go down that route, a few things would happen:
  1. ?200k+ equity investment (good)
  2. Investor would have an executive seat on the board (could be good or bad)
  3. Investor would be required to work as an employee of the company and cannot work anywhere else (both positive and negative but seems risky)
I'm definitely going to investigate it further and explore it as a valid option for funding, but I'd like to get some feedback from the group on what things I should consider.

Has anyone else done this before? What advice does the group have for me?

9 Replies

Steve Everhard
2
0
Steve Everhard Advisor
All Things Startup
David you've pretty much nailed it. For their T1 they need to show active involvement in the business and that you have recruited on average at least five employees. Their ?200K cannot simply be an investment and it needs to be seen as being at risk so must be employed by the company.

As with all active investors/execs fit is everything and I wouldn't go down this route simply for the money. Brides for cash was always a risky business opportunity!

Brett Noyes
0
0
Brett Noyes Entrepreneur
Managing Partner unbank.ventures
I have not worked with T1 investment but I have worked with EB3. I believe EB3 is similar but does not require the investor to work for the company. The projects I have seen have not been ideal for either the investor or the founder. If you have other opportunities to raise funds I would recommend pursuing them.
Manish Koshal
0
0
Manish Koshal Entrepreneur
Prop. of Second International
Although I have not created such an environment earlier but I think there is no harm in trying because an investor would not jeopardize his investment and you are safe as you are a majority stake holder. I am also looking for an investor for my Matrimonial project and am prepared to try new ways of investment. Trust, it helps.
Thomas J. Kaled
3
0
Thomas J. Kaled Advisor
Business Development Consultant @ thomas.kaled@gmail.com
If you are an S Corp (I guess PLC in your case) there may be a limitation in ownership relative to UK citizen/UK non-citizen. US you have to change your Corporate structure to accommodate a non-US investor if an S-Corp.
David M. Brown
0
0
David M. Brown Advisor
Helping online retailers and ad networks reduce waste
Thanks for the feedback everyone. I should have included in my original question that this is in the UK.
Natasha Homer-Earley
0
0
Natasha Homer-Earley Entrepreneur
Founder Gujiwo.com
I've been looking at this for my Startup , especially as my Startup is aimed at the Chinese market. I've heard this has got a lot harder to get & takes at least 6 months of quite onerous due dill.
David M. Brown
0
0
David M. Brown Advisor
Helping online retailers and ad networks reduce waste
Natasha -- I think our current investors will lead the round and do all the due dil, but I expect there to be some additional work involved.
Chicke Fitzgerald
0
0
Chicke Fitzgerald Entrepreneur • Advisor
Game Changing Strategist, Advisor & Technologist | Board Candidate | Zigging where others Zag
David, I have a colleague who has been working with the Chinese on these types of programs for the last few years (nothing happens fast with the Chinese). While he has worked with the US aspect, I'm sure that he would be willing to connect with you if you need more direct knowledge of the mechanics. Connect to me on LinkedIn and PM me.
David Austin
0
0
David Austin Entrepreneur
Entrepreneur
If they are working as an employee of the company then what is their expected rate of pay for an executive level employee of your company? The devil is in the details.
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