The Situation

Another firm brought me in as outside counsel. The client wanted an E-2 treaty investor visa to run a trading company he and his partner were forming in the United States.

The company would manage the assets of a hedge fund under common ownership, deciding when, where, and how to invest, and executing those strategies. Straightforward business, straightforward visa category, but with two underlying issues that made the case anything but straightforward.

The client had to be the principal investor, which meant owning and controlling the enterprise, with his partner, the U.S. citizen who founded the hedge fund, in the minority. That meant funding the controlling stake himself. He didn't have the money.

What he did have was a proprietary dataset and trading software he had spent years building. The software ran advanced statistical analysis on financial markets data, identified recurring patterns, and automatically generated investment strategies from them. It placed and executed trades through electronic market access platforms. Functionally, it was the entire business.

The software's value was never in doubt. Its price was. No one had ever put a number on it.

The Strategy

Before the application could be filed, the software had to become capital.

The first step was a credible valuation, one that would survive consular scrutiny, from an independent expert with genuine standing in the quantitative trading sector. The Foreign Affairs Manual permits this: intellectual property can count as E-2 capital to the extent its value can reasonably be determined, and where the asset has no available market value, that value may be established by expert opinion. 9 FAM 402.9-6(B)(h). That kind of expert is harder to find than it sounds. I found one.

But a valuation alone wasn’t enough. The software had to actually belong to the company, which meant drafting an asset transfer agreement that cleanly conveyed the client’s intellectual property to the E-2 enterprise. The investment is only an investment if the enterprise owns the asset. The agreement had to specify exactly what was being transferred, under what terms, and what the company received in exchange. A sloppy transfer agreement would have unraveled everything the valuation established.

The business plan needed work too. The draft buried its substance in regulatory jargon about proprietary trading algorithms and financial disclosures no one could be expected to digest fully awake. I brought in a writer who made it readable, even interesting.

The appraisal came in. The software and its underlying datasets were valued at 87% of the enterprise’s projected startup costs.

The Result

E-2 approval in ten weeks.

The client told me afterward that the interview had lasted ten minutes. The appointment letter from the consulate had listed documents to bring; the officer asked to see none of them. She asked what the business did, how it charged its clients, whether the client owned the software outright and was bringing it into the company, and whether the business was new or bought from someone else. He answered; she typed; she approved the visa at the window.

That was it.