How important is the disconnect between the Silicon Valley and Washington, D.C.? As the United States transitions from an industrial economy into the Information Age, the importance of Washington securing legislation and regulations that promote security and innovation has perhaps never been greater. Small businesses are the source of many jobs, and yet the barriers that entrepreneurs face in getting startups off the ground are legion. Stimulating open government entrepreneurship is a key issue for the Gov 2.0 movement and yet the examples of successful startups are dwarfed by the pages of the regulations that govern them.

I spoke with Brad Feld about all of these issues at the Gov 2.0 Summit earlier this month. Feld has been an early stage investor and entrepreneur for over 20 years. Prior to co-founding Foundry Group, he co-founded Mobius Venture Capital and, prior to that, founded Intensity Ventures, a company that helped launch and operate software companies and later became a venture affiliate of the predecessor to Mobius Venture Capital. Our interview is embedded below:

Those concerns where voiced yesterday by LinkedIn founder Reid Hoffman this week, who told Hillicon Valley that entrepreneurs in Silicon Valley could benefit from a stronger lobbying presence in Washington D.C.:

“I realized one of the paradoxes of the entrepreneurship ecosystem that is so important to society is: We don’t have an entrepreneurship lobby,” he said, “because entrepreneurs are off doing it.”

Policymakers tend to ignore start-up concerns, according to Hoffman.

“The natural process of ‘oh, I’m responding to these lobbies, I’m responding to old political interests’ tends to always drown out the entrepreneurs,” he said.

It’s easy to ignore the concerns of newer companies, according to Hoffman, a partner at Greylock Partners, a venture capital firm in California.

“Some folks are trying to [help] but people are like, ‘OK, I can deal with that later; I don’t really care,'” he said.

Stimulus funding is a key example of startups getting government short shrift, according to Hoffman.

“The way this is described is ‘shovel-ready jobs,'” he said, arguing that kind of funding would not benefit new companies who are “key to our future.”

“It’s much easier when you’re embedded in the political infrastructure to respond to immediate things” such as the stimulus package, he said.

StartUP Visa

Another issue of critical importance to entrepreneurs is top technical talent. That’s why Feld and others have been advocating for a “startup visa.” In the video from Gov 2.0 Summit below, he talks about the startup visa legislation and why it matters to VCs and the innovation economy.

According to the website supporting the legislation in the Senate, S. 3029, the StartUP Visa Act alien entrepreneurs who have received significant capital from investors to establish a business in the United States. Specifically:

Have a required amount of financial backing from a qualified investor or venture capitalist

Have a commercial business that will generate a predetermined level of employment, revenue or capital investment

The goal of the StartUP Visa legislation is to create an alternate visa system to the H1B program, in which temporary visas are granted to immigrants working in specialized fields including the high-tech industry. Currently, there are 65,000 HIB visas awarded to immigrants and an additional 20,000 H1B visas awarded to individuals who hold an advanced degree. Additionally, this legislation would create a new set of visas that require immigrants to invest at least $1 million dollars in the US and employ at least 10 people.

One hundred and sixty venture capitalists and angel investors support the bill. According to the National Venture Capital Association (NVCA), 25 percent of America’s venture-backed and publicly-traded businesses, including: Google, Yahoo!, eBay, Intel, Pfizer, DuPont and Procter & Gamble are examples of American success stories founded or co-founded by foreign born residents. Further, in 2005, these companies netted more than $52 billion in sales and employed 450,000 workers. In 2006, 24% of all filled patents had foreign residents listed as the inventor or co-inventor.

To date, the StartUP Visa Act has not advanced beyond committee.