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As a business, what are the pros and cons of working with EB-5 investors?

I have patented an idea, and had it approved for use in several states. I am now looking for investors to fund development of the patent into full production. What are the pros and cons of working with EB-5 investors?

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    A Olusanjo Omoniyi

    Immigration Attorney
    Answered on

    Working with EB-5 investors is challenging particularly with an idea that does not have any track record of being a commercial success. If your goal is to secure EB-5 investors, you should place emphasis on presenting a well-documented plan to the investors by which you can justify that your patented idea deserves funding. Also, do not approach your funding from the dual pros and cons analysis only. The question is, is your business adequately planned to attract EB-5 investors? This is primarily because the main goal of each EB-5 investor is to secure a green card, while at the same time wisely investing their money in a profitable venture. In your case, you must fulfill all the EB-5 requirements: 1) investment amount of $500,000 for rural area or $1 million for urban area. The question is where do you plan to set up your business? 2) Also, your business must create a minimum of 10 jobs. Can your patent, if commercialized, create 10 jobs within two years? and 3) If all funds are obtained, can you successfully put your business plans into operation? On these questions and issues they raised, work with an EB-5 attorney who can bring all the necessary expertise together to create a successful business venture.

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    Julia Roussinova

    Immigration Attorney
    Answered on

    It might be very difficult to secure EB-5 investors for a business that only has a patented idea. There are many variables to consider. Please consult an experienced EB-5 immigration attorney to discuss the specifics.

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    Philip H Teplen

    Immigration Attorney
    Answered on

    EB-5 can be a great source of funds. It is all a function of structure, but is a hard sell to a new business .

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    Ed Beshara

    Immigration Attorney
    Answered on

    The advantages include the fact that each EB-5 investor will have to invest a minimum of $500,000, and in an EB-5 regional center loan model they will not be equity owners of the job-creating entity which may own your patent and operate the business.

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    John J Downey

    Immigration Attorney
    Answered on

    Too many to list here, especially if you only have a patent to bring to the table. They like to see your money involved as well as theirs.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    Generally, EB-5 investors require a lower rate of return than traditional funding sources. Also, as there is so much interest in the program, the possibility of attracting many investors is high. However, you need to be able to structure the business in a way that is compliant with USCIS rules and regulations, but is also marketable to potential investors. There are up-front costs for the various professionals that will assist with the structure and documentation, but that cost results in an approvable project. A U.S. immigration attorney with experience in EB-5 is essential in this regard, as the EB-5 program is a U.S. immigration program.

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    Aleksandr Troyb

    Immigration Attorney
    Answered on

    This is an extremely complex question that is impossible to answer in a forum. There are simply too many variables, many of which will depend on your business (structure, etc.) If you are seriously exploring this issue, I would suggest that you sit down with an immigration attorney that is familiar with EB-5 matters and discuss this in detail.

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