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Why Startups Should Choose Canada Over Silicon Valley (techvibes.com)
131 points by dquail on April 8, 2013 | hide | past | favorite | 106 comments

I have a few problems with this article, namely the comparisons drawn between The Valley and Canada.

I am currently a Canadian citizen, working in San Francisco at a company that moved from Vancouver many years ago.

The author seems to be comparing the Bay Area to the entirety of Canada. Canada is not a small area, a city or a state. It is an entire 'continent' spanning multiple provinces with very different laws and dynamics. A startup in Waterloo, Ontario targeted towards engineering may fare better than one founded in Vancouver.

Secondly, he is mentioning his connections in the Bay Area that have helped him succeed in Canada. First he is arguing FOR founding a startup in Canada but then admits that most of his barriers to entry were lifted with help from the valley. There is a difference when you're starting fresh in Waterloo without any outside help.

I think what the author should have done is draw a parallel between The Valley and somewhere in Canada (Waterloo, Vancouver, Montreal, etc...). One may not be better than the other but perhaps working WITH The Valley can help get your startup off the ground elsewhere.

I would personally love to work for a startup back home in Toronto and perhaps one day found my own but I don't see the same enthusiasm towards tech and startup in Toronto that I see here in The Valley.

"I don't see the same enthusiasm towards tech and startup in Toronto that I see here in The Valley."

Having tried establishing my startup in Toronto before, I fully agree with your statement. I know at least 6 more people who got frustrated trying to start tech companies in Toronto/Waterloo and finally gave up and moved to US/valley.

Most Canadian govt funding programs for startups (I tried) are for politicians to handout to their supporters. You need to be incredibly well-connected to overcome the barriers set to get funding.

Most people involved in startup/tech wouldn't give a chance to local startup unless there was validation from someone in US or valley. It was funny that one local VC I was trying to connect with wouldn't return my calls. One evening, when I sent him an email mentioning that I have a meeting with a NY VC next day, the guy calls me 11pm in the night wanting to know more about my startup.

Without valley/NY connections, it is incredibly difficult in Toronto for a tech startup.

The great Canadian startups I know don't look incredibly highly of government programs (namely SR&ED and IRAP). They're great, but can be distracting, taking you away from building value in your startup and into filling out meaningless forms. That said, free money is free money, and I've seen successful startups (that aren't politically connected) leverage these programs without being distracted.

I don't want to get into a whole thing but as a co-founder in Vancouver getting SR&ED and IRAP support I have no idea what any of you are talking about in this comment thread.

It's remarkably little work to do the paperwork. It's annoying, sure. Who the hell likes paperwork? But a "distraction"? Oh please.

If I wasn't getting the money I would honestly be a little annoyed at how little accountability there seemed to be to get public money.

And the whole political connections thing ... I don't even know where to start with that one. I have none and no one I know has any.

I notice no one here has firsthand experience with either. I wouldn't have commented here but I felt I had to leave something here so that other readers wouldn't come away with an opinion that's ... let's say "uninformed".

We leverage both SR&ED and IRAP at our company, but it's difficult. It is a huge distraction, taking valuable time away from actual research and development. They requirements are way too stringent in my opinion. There should be tax credits or funding specifically for startups, especially startups still trying to find their product/market fit in the early stages.

That's consistent with my experience. Not only onerous paperwork; but very poor advice wrt how to build a business. This is federal money not intended for high risk high reward opportunities. The advice I got was "you should focus more on a niche instead of a mass market. Your chances of success will be much higher"

Same experience for me when trying to access government funding programs.

For one, the people you are talking to have zero experience in running a business, let alone a new one. They do have, however, extensive experience in drawing out meetings, death by powerpoint and producing forms in triplicate.

The grants generally come with a lot of reporting and strings attached, and generally require very large investments to be worthwhile.

We can get R&D tax concessions which are quite useful but the amount of money you need to spend in order to qualify excludes any sort of early-stage tech venture.

The entire process was a giant waste of time for me, and I get the impression they are political operations rather than genuine ones. In fact in my research I found out that infrequently do the funds ever actually give out all the money, but a good portion of the advertised spend (ie, $x00 million in new company grants) actually goes to the departments that spend their days handing out the money.

Not to say that the guys weren't genuinely trying to be helpful, they were. But they are hamstrung by their own reporting requirements and lack of understanding as to what people need money for, and when they need it.

My ultimate conclusion is that special economic zones with, say, 10 years of a tax holiday for a new company starting within that area would be a much better way to go about things. That would spur local investment and employment, have a specific end date and be much easier to administer. It would also favor bootstrapping as opposed to trying to capture large starting funds, which IMO for the outside-the-valley world is a better way to go.

>"The grants generally come with a lot of reporting and strings attached, and generally require very large investments to be worthwhile. We can get R&D tax concessions"

I have a bit of experience with SRED in Ontario, and quite a bit with the Alberta Foundation for the Arts.

Grants are nicer for you (me), but tax credits are doing it right as far as the government is concerned. Canada wants you to create employment. If you have a business that is generating revenue and creating jobs, they'll "give back" money that equates to, sometimes, paying wages at 50 cents on the dollar.

Tax credits are an economically efficient way to distribute government funds.

http://www.zec.org, of course Europe is a whole different ball of wax.

Those are terrible news for me since we were considering moving to Toronto, and what you mention is exactly what I was afraid of.

Now that nepotism sounds more like something that happens where I live, funny that there's the same cronyism over there.

As someone who works at a Toronto startup, I suggest that you consider more than one person's opinion. No city is perfect but there are tons of talented people here and there is substantial government funding available that, in my experience, has nothing to do with nepotism.

I don't care a lot about government loans since those are a pain to get, I rather get a proper investor community, how is Toronto's?

Thanks for sharing your info and experiences. Very helpful to know for the future.

* Disclaimer - I wrote this post. Totally agree, Canada is incredibly diverse so this article is a bit overgeneralizing. Starting in Waterloo / Toronto / Vancouver / is night and day to Winnipeg (nothing against winnipeg).

The main take away is to be wary of the hype in the valley. That pervades the culture. Everyone from investors to your family fill you up with hype. You don't get that in Canada. You've gotta fight harder. That, in my opinion, isn't a bad thing. You can go much further on a dumb idea in the valley. *and yes I know that some of the best startups were once dumb ideas. But I don't believe the "valley" made them succeed. I think there's more companies that die because of false positives than companies that succeed in spite of not having them.

And yes. I readily admit that you need connections in the valley. I wouldn't be starting in Canada if I didn't already have a killer bay area network.

BTW. I toured Toronto not that long ago and visited Extreme(s) as well as a few other startups. I was blown away by the quality of stuff being built there and Waterloo. I'd not hesitate to start or join something there. There's real energy in that city ... and it's growing.

I'm glad you had a great experience visiting Toronto and experiencing the startup culture there.

I'm sure I'll see the area totally different when I return from SF and I may just find a role that I fit in very well.

I totally agree with you about the over inflated hype currently in the valley. While this leads to a lot of failed startups and 'wrong' ideas being funded, I think it's still a healthy ecosystem for promoting innovation.

Like you said in your article, shooting for the moon in Canada makes you seem insane while it's seen as commonplace in SF.

The hype and "over-investing" is deliberate.


Well, let's face it, the most revolutionary things have all started sounding silly and insane. People will buy things over computers without having actually seen or touched them? Humans will fly? Will travel to the moon? Everything is actually well modelled by equations that imply that everything is a wave and has probability it exists?

So just because YOU think it sounds crazy or insane, doesn't mean it doesn't have a chance at something big.

After all, who would want to communicate in 140 characters only, or have a real time feed of everything their friends do, or want tiny square pictures on their phone?

On the subject matter, I've lived in SF for a few years now and I was born in Canada. In the US people will give you a chance, in Canada companies want to know what you have done and get you to do more of it.

>So just because YOU think it sounds crazy or insane, doesn't mean it doesn't have a chance at something big.

This is true. I can name half a dozen billion dollar companies I rolled my eyes at when people told me what they do.

"They're trying to make money by having people tell everyone they know what they ate for breakfast? Really?"

Yes, a lot of big companies were once ridiculous ideas. The founders where tenacious, and would have succeeded regardless of any synthesized hype. I argue there's more companies hurt because of this than there are that thrive.

Thanks for the shout out David!

Ya, I've been meaning to reach out and connect with you personally for some time now :) <3 Extreme Startups!

Agreed. A lot of people seem to be mentioning Toronto (never been) but can anyone comment on the tech/startup scene in Vancouver (loved it but it seems very small)?

There's a lot of development talent and ambition in Vancouver, and a healthy chunk of it not at all related to the video game or movie industry; there are quite a number of legitimate start-ups going on, most of them seemingly located down in Gastown.

The biggest barrier to start-ups in Vancouver is probably investment availability. There's a few active angels and VCs but you can count them on one hand. The majority who want in seem to be incredibly risk-adverse, treating a 50k angel investment as though it were the last gold bullion on earth.

On top of that, Vancouver is very lifestyle-driven, especially once spring and summer roll around. The mountains and ocean are seductive (that's why I moved out here), and make it seem like insanity to spend 16 hrs a day toiling in front of the computer when there's an entire playground out there.

So, if I were going to start a high-energy start-up, Vancouver is not where I'd pick first.

There are a few really successful companies here in Vancouver (Hootsuite, Clio, Unbounce, A Thinking Ape, Indochino), a healthy early-stage ecosystem (LaunchAcademy, GrowLab) and a great pool of developers and designers (that's why you have Facebook, Amazon, Microsoft and Apple all having development offices in town)

There is definitely a lot of talent in Vancouver, though many of the people I know have their eyes set on SV/the U.S. Investors here are very hesitant to open up their wallet (much like areas like Australia). Some big companies have development located here, but I would not say the startup scene is very big at all.

There are accelerators like GrowLab (since 2011), but nothing like the valley. I definitely agree with the overall premise of the article though, people here see a lot of the "money-throwing" over in the valley and feel it's often way overblown/hyped.

The Vancouver scene is small but close-knit and growing. The core of it is based in Gastown, within about a 3 block radius of GrowLabs, one of the bigger incubators there. There is great talent without Silicon Valley salaries and a few active angels, but I think its harder to raise bigger rounds, at least locally. This will improve when Hootsuite or another local company has a big exit or IPO, and the government is trying to inject money into venture capital.

The good news is SFO is only a two hour flight, and Seattle about that far by car. I think raise in the USA, build in Canada is a great strategy, and quite a few of the successful start-ups raise from both Canada and the US.

There is starting to be a bigger start-up culture. Its not like SF and area where it seems like everyone is doing a start-up, but it is now something that a lot of young people are thinking about and is seen as a respectable way to spend your time.

There are good government programs in Canada, but my limited experience is they aren't what you want to bank on if you are a small, vulnerable start-up. I think where they do come into benefit is in growing from a 5->50+ person outfit.

Vancouver also has a good brand for the right kind of company. Its definitely a lifestyle city (great place to live, but lots of distractions from 24/7 work) - and would be a great place for health/fitness/outdoor activity start-ups because of that. There is a kinda cool video about the Vancouver tech scene from a few years ago: https://www.youtube.com/watch?v=MLQQ3w12Juc

Vancouver has exceptional talent, a shared time zone with the valley, and ski hills minutes away. Grow labs and launch academy are also seeding and launching legit companies. All this adds up to a pretty strong scene. I'm not aware of investors stoned Boris and Bdc ... But again, SV investors aren't shy to invest globally. In fact, many including Dave McClure, and our former investors (tandem entrepreneurs) focus on these markets.

It's funny that theres a west coast startup lab called "grow labs". Wonder what sort of business ventures they focus on.

Rose coloured glasses. You want to startup in Canada? Either a) have access to network with money, or b) bootstrap like there's no tomorrow.

Investors in Canada have an appetite for risk somewhere in the neighbourhood of "mutual fund vs GIC" levels. For someone with Silicon Valley connections, fine it could work, but this is not good general advice.

Even iNovia, which is probably the most forward looking VC in the country, has a fairly small fund (low $100M if memory serves), I believe below the size of the average US fund.

This man here speaks the truth. Without revenue, it is easier to get a $30k grant than it is to find an angel investor willing to invest for the same amount. (Source: I raised a $30k grant in about 3 meetings and 5 hours of paper work. I also spent about 6 months with two idiot "angel investors" from Ryerson Angel Network when I was young and dumb and didn't close a dime. One guy said he wanted to invest but sheepishly said "I'll have to ask my wife first, since it is $10k". More like RRSP investors. The only angel investor in Toronto that is worth anything is the one guy from maple that told me that nobody in the city has any money and to just get on bootstrapping.)

It is even easier to raise $800k in grant money too. Depending on your startup, the CMF may think that your startup is in fact an "emerging digital platform" that has promise. Most startups I know that raised this type of capital did so from Americans.

If you are a Canadian angel that disagrees, feel free to talk to me. I know a bunch of pre-revenue startups that are cool, but you won't ever hear of because they've all given up hoping to raise Canadian cash.

I've wondered about becoming an angel investor in Canada. I guess the ability to invest $10,000 without asking a wife qualifies me.

Why does everyone seem to think you need to raise money from Canadian investors? We raise from US investors in our first startup. We were Canadian nobodies with nothing but a beta as a pitch deck. Yes, it's easier to raise if vc's can drive down the road to visit .... But it's a lame excuse to use.

When you are in university or fresh out of it you don't know to get us angel funding.

Not a Canadian angel but an early-stage fund (www.versiononeventures.com) - would love to talk to the start-ups you are mentioning - thx for making an intro.

* Disclaimer - I run Extreme Startups *

Accelerators are a great source of private capital that can be great social proof for angels - just make sure the one you choose / apply to are VC backed because those will be the ones that force you to think big and shoot for the moon.

The CMF is a big pot of money but to be in the running for funding you almost certainly have to hire a "consultant". There are many hoops, and they can be costly.

One thing that Canada has in it's favour is that for competent CS graduates, you're competing with stultifying companies rather than companies in the SF bubble. PagerDuty is one of those companies that I expect Canada would've been happy to keep, and we're loving it in SF, but we're fighting with a lot of similar companies for people.

This year, we opened up an office in Toronto, and even though our standards are the same (exact same interview process everywhere) we've had a measurably easier time attracting CS talent.

But can't Canadians move to the valley too with the TN visa?

Canadians can move to the valley with a visa but there are a lot of Canadians who want to stay in Canada. I live in Waterloo and am a CS student and I have talked to hundreds of students who do not want to leave Canada, even if they are offered a very attractive package from a company simply because they like Canada. Myself being one of them.

Us Immigration sucks. But if you're a talented engineer ... You can get down there. But there's plenty of Canadians that would to prefer to stay.

I run an internship program placing Canadian interns in the valley, and have interviewed plenty of students from US schools. There's some amazing students coming out of Waterloo and UBC in particular. Waterloo grads are as competent and hungry as grads from MIT or Stanford. I've been amazed with them.

You should have spoken to them pre-2001 then. Waterloo dumbed down the first two years to be "more industry focused".[1]

Waterloo has been founding great companies for decades - the Watcom compiler came out of there in the 80's and 90's.

1. A quote from a friend who did his PhD there during the period.

I'm sorry, but are you claiming that the education has been dumbed down post-2001? As a computer science student that witnessed the shift in education, I can assure you that the system has only increased the level of breadth and depth (and therefore academic difficulty) since the pre-2001 period.

Before 2001, Waterloo Computer Science offered Java courses and taught "more industry focused" material. Ever since, with the aid of a certain PhD here, the curriculum teaches functional programming (via Racket) from the start and carries its focus over the entirety of first year.

Following this, the second year courses are standard at any university and act as precursors to the third year Operating Systems and Algorithms courses, the most difficult required CS courses offered here.

I don't buy that. MIT and Stanford are the undisputed best in the world. Waterloo would be closer to "University of Texas-Austin" which is still excellent.

I don't buy that MIT and Stanford are undisputed "best" either. But they're damn good. And definitely top tier ... my point is that Waterloo and UBC are in the same ball park as the top ones.

My comment of "not buying it" was that there was no evidence (other than your opinion) to support your claim. Honestly, I would like to hear more about how you came to that conclusion.

I know the rankings are only one way to estimate (and would like to hear a better way :)

Is there a list that puts Waterloo or UBC better than Stanford or MIT? ANY LIST BY ANY MAGAZINE?


University of Toronto (15th) UBC(27) Vs MIT (1) and Stanford (2)

What about ACM competition?


Year 2000: UBC tied with Stanford (difference in time, not by much)


Year 2002: UBC and SFU tied with Stanford (won on time)


Year 2003: top 5, 3 from UBC, 2 from Stanford


Year 2004: top 4, all UBC and SFU

Year 2005: top 4, 2 UBCs (one winner), 1 SFU, 1 Stanford


Year 2006: UBC rank 1st and 2nd, followed by Stanford 3rd + 4th


Year 2007: Top 2, UBC, Stanford 3rd, SFU 4th.


Year 2008: UBC went down to 4th and 5th


Year 2009: UBC 1st, followed by 2 Stanford teams


Year 2010: UBC 4th, tied on # of solutions, diff on time


Year 2011: UBC 2nd, Stanford 1st


Year 2012: Stanford 1st, 2nd, UBC 3rd


So, is UBC good enough to hang around with the big boys? (consistently)

A good direction seems to be Waterloo/Velocity->YC->Seed round->Main office in Canada

There's a ton of advantages of having your main office in Canada, but there are many disadvantages as well. Seed round pretty much has to be done in SV as Canadian investors are notoriously cheap and horrible [1]. So you get your seed money in SV and then work for cheap in Canada.

The downside is that not having "close" communication with your investors may impact follow-on financing, though that remains to be seen. Also, for certain types of companies being surrounded by a bunch of other startups can be very useful.

No matter what, if you're going to be in the tech industry it's usually a good thing to have some contacts and relationships in the valley. If you're a first time founder then doing everything from Canada is going to be difficult. If you've been around the block a few times, then the downsides aren't so bad, and the upsides are major.

[1] Unconfirmed, but I heard a stat recently that BDC takes controlling interest in 75% of their pre-Series A deals.

Other than the Dragon's Den show that makes a mockery of early stage entrepreneurs, or "cockroaches" as one panelist likes to refer to them, Canada has failed miserably to participate in the tech scene.

From a recent report by the Conference Board of Canada titled "Canada Fails to Put its Money Where its Ideas are—and it Shows in Poor Innovation Grade":

"Ottawa, April 4, 2013—Canada ranks second-to-last among its peers in venture capital investment and business R&D spending, according to The Conference Board of Canada’s ranking of innovation among the world’s leading economies. And the rest of the report card doesn’t get much better, as Canada ranks 13th in the 16-country How Canada Performs benchmarking."

Google the report if you have any dillusions about doing a startup up in Cantada

The state of local VC is only one of many elements to measure startup prospects in a market. Given "the market" is becoming more global, I'd argue "local VC" is becoming moot

The inability to access vc in Cantada is moot, maybe if you're 16 and living with your parents.

I suppose Canadian bootstrappers could always mine for bitcoins... that's pretty modern, global too!

would be funny if wasn't so true

I'd love to choose Canada, but the last time I looked at the immigration 'points' system, they only want me if I have $500k+ USD worth of money to invest in the country (hah, as if I'd need to move if I did) or I'm a fluent French speaker...

That's incredible! Thanks for the link :)

EDIT: Bah, too bad they demand proof of secondary education. Sucks for people who couldn't afford college...

The same problem occurs for a Canadian with no college degree (but tons of freelance dev experience) wishing to move to SV. Anyone here know a good way to get around that?

Some details: I took two years of university so far, but ran out of money to keep going. I'm now living month-to-month (averaging about "feed myself and pay rent for a room") doing severely underpaid web-app development (think ELance rates.) Apparently my skillset (Ruby, Erlang, systems-level/embedded C, Clojure, some Cocoa Touch experience) would be making me at least $100K/yr in SV, but nobody wants it up here in Vancouver; it's all ASP shops and C++ game-dev, and most of the gigs I do get end up being in PHP, even though it's not my forte.

I really don't want to spend however-many more years it would take to pay my way through school at this rate, struggling out in the software "hinterlands", when a better life is just one border-crossing away.

And technically, If I'm asking for a pony, I don't really want to get hired by a Microsoft or a Google and only work in the US for them; I want to go to the US because I want to participate in SV startup culture, which both includes working for a startup, and starting my own. It seems like that possibility is just locked out for anyone but permanent residents of the US, though.

If by diploma you mean a 2 year (which is usually what it means in Canada), it won't be enough on its own.

You can actually get an exemption if you can demonstrate equivalent knowledge and a career progression towards it. What that usually means is having a professor of your field vouch for your knowledge and being able to prove work history for 3 or 4 years of each of the four years of university you didn't take. A two year diploma may cut that amount in half, but I wouldn't necessarily count on it.

If your work history is hard to prove you may want to try other types of visas. TN-1s aren't so difficult, but re-entry can apparently be a pain. You can also get an equivalent to an H-1B by working for a Canadian subsidiary (of, say, MS or Google) for about a year and then getting a transfer to the American head office. I believe these are much easier to get.

And then there's the traditional ways, like being sponsored by family etc. Unfortunately, no matter what, a degree will make it much much easier.

> If by diploma you mean a 2 year (which is usually what it means in Canada), it won't be enough on its own.

I really did mean a four-year; I just said "diploma" because "degree" implies education was involved. The diploma is the piece of paper. :)

> prove work history for 3 or 4 years

Does that mean employment history? I don't have much of that. Completed contracts, certainly, but I've not been "on payroll" anywhere for more than six months at a time.

Well, in Canada it's very unusual to call a bachelors a diploma. The piece of paper is a degree. Diplomas are for two year colleges and high schools.

I think the work history requirements might have relaxed in recent years a bit, but not by much. 10 years seems to be the point where most American employers start to seem optimistic about being able to get you an H-1B without a degree. But if it's not employment experience you'll have to work twice as hard to document it, and that can be very difficult. Most of my work history, for example, is tied up in companies that no longer exist or as contracts, as with you.

http://careers.microsoft.com/careers/en/ca/home.aspx https://jobs.ea.com/locations/canada/ http://www.google.ca/about/jobs/locations/waterloo/

I also think there was an article here recently about Facebook setting up a Vancouver office just to bring graduates through the subsidiary employment process. It's a one year thing specifically for that purpose.

Drop me a line: box2850 at hot mail com dot. We have dozens of open coding jobs in Vancouver - and none of them are ASP or C++ game dev.

Last time you checked was probably before last December's massive overhaul of the points system (which goes into effect in 4 weeks).

Hint: If you're an English speaking American with more than 5 years of work experience or a bachelors degree you have enough points- no investment fund needed.

See: http://gazette.gc.ca/rp-pr/p1/2012/2012-08-18/html/reg2-eng....

> Hint: If you're an English speaking American with more than 5 years of work experience or a bachelors degree you have enough points

As an English speaking South-African finishing a PhD at an American university, it's good to know there are other options if the U.S. decides not to give me an H1-B (the quota was exceeded in the first week, so apparently we all get put through a lottery: https://news.ycombinator.com/item?id=5513761)

Canadian residents are covered by universal healthcare, can vote, can work, etc. (That's a lot more than the U.S. offers residents.)

You need 67 points to get residency status in Canada.

With the new system:

PhD? 25 Points

Speak English? 24 Points

Under 35? 12 points (less 1 point per year over 35)

1 Year of work experience? 9 points

Total: 70 points

There are a lot more ways you can get points. But if you're a young or middle aged English speaker with a degree or a few years of job experience, you're in.

Anyone know how long the entire process takes -- from sending in the application, all the way to being able to cross the border with a moving van -- using the points system?

When I did it in 2004 it took one year almost to the date to get the approval, another 6 months to get the visa (you need to submit medical test). There is/was a web site where people posted their times so you could get an idea, also there's the official site, I don't remember if they give some times.

It used to average about 6-8 months. With the overhaul going into effect next month, they expect it to take 4 to 12 weeks for Americans and 12 to 16 weeks for other countries.

Canadian residents most definitively cannot vote, they pretty much can do the same as a citizen except for voting and spending too much time out of the country.

I think that's for the investor visa, I immigrated as a skilled worker (points system)

http://www.cic.gc.ca/english/immigrate/skilled/ , currently you only need to prove 11k in savings and the other requirements seem pretty accessible to anyone imho.

@versiononevc is one of the funds that is designated for Startup Visa Canada - shoot me an email, happy to talk

It seems disingenuous for the OP to advocate Canada because of the US immigration policy when hiring non-Canadians to fill jobs usually requires a Labour Market Opinion proving that you couldn't find a Canadian to fill the job.

The US system requires the exact same thing.

Yeah, that's my point. OP criticized the US policy and presented the Canadian system as an alternative when it isn't.

In fact, the only benefit here seems to be for founders, but given the comments about the lack of angel/VC money in Canada, fulfilling the requirements looks to be difficult.

To those complaining about raising money as a Canadian startup. Overly simplified steps: 1. Stop whining. 2. Build something awesome. 3. Spend time on angelist angel.co 4. Spend time on hipmunk.com booking your trip 5. Be thankful you're starting your company in 2013 and not before 2009 when tax laws made it painful for foreign investment, there wasn't a frothy environment in the valley, when fundraising was actually hard, when starting up was way more expensive. 6. Watch the money roll in.

As a VC in Silicon Valley I have tremendous respect for the Valley, but I must say (having formerly lived in LA) it sometimes feels like a 1 industry town. In L.A. every and his brother "had a screenplay." "Oh man, can you read my screen play? We're looking to raise a million for this indie film." In Silicon Valley say you're a VC and my lord the way people change, from talking to you casually to looking at you like an addict and you're a bag of heroine they desperately need.

Startups CAN actually survive and meet early milestones without us VCs you know. In Canada I'll bet it would be refreshing to "have" to meet those early milestones without being made to feel like a failure just because you're not already "funded." "Are you funded? Yeah, by who?" "You're not funded? Oh bummer." (Person walks away.)

So eventually a Canadian entrepreneur may need/want to move to Silicon Valley, but I'll bet they learn alot - and find it alot more refreshing - to start out at first without the non stop "you got a screenplay? you got an agent?" equivalent I see and hear every day and every hour in Silicon Valley.

We VCs aren't the be all end all.

Happy to take any questions from entrepreneurs.

Absolutely agree (I wrote the post). It's amazed me (but not shocked me) to see so much of the commentary focus on the state (or lack thereof) of VC in Canada. VC can be a means to an end. But it certainly isn't the end ...

Being in Canada also means flying under the radar, which can be a good thing for long term viability of your product.

My company does 100x the traffic of our nearest competitor but you'll never see a TechCrunch article about us, since we're in Toronto. So there's no pressure for overnight success and you can work diligently towards making a better product instead of meeting unreasonable expectations.

Being in Toronto has nothing to do with seeing (or not seeing) a TC article about your company.

TC covers plenty of Toronto based startups, including the last two that I've worked for.

Also, seeing your company on TC isn't all that useful anyways...

I think he was using techcrunch write ups as an example. In Canada, there seems to be less time spent focusing on the tech elite echo chamber ... keeping up with the startup benjamins.

If I were doing something legally challenging in any way related to copyright or privacy/security of consumers (particularly w.r.t. finance), I'd seriously consider (in no particular order) CA CH NZ HK SG various-EU.

Curious where Chile and Brazil fall for privacy/security stuff, including AML and general financial regulations. Costa Rica and Panama are the traditional Central American options, and there are the Caribbean or other island/tax haven options, but a lot of those are too small to have developers (and expensive), and will bend over for the US officially or unofficially, particularly if a small business is involved (without political connections); I made the mistake of doing stuff in Anguilla before.

To be clear, this is specifically aimed at telling Canadian startups to stay in Canada. YMMV.

I wonder if cheaper health care costs give Canada any kind of advantage business-wise?

In Vancouver you can easily score awesome developers for 80K/year (160K in the valley) Through SR&ED you can get up to 40% of this back (so you're down to 50K / engineer (*note that I've not personally used SR&ED but I know others who have successfully). And finally, benefits packages are in the low thousands / year instead of tens of thousands. All told, you can build a team of awesome engineers for 1/2~1/3 the price of what it'd cost in the valley.

Absolutely they do. Employers don't have to chip in for basic insurance... that's already paid for. Employers end up taking part of that money and throwing it into extended benefits: in Vancouver I get $200 every 2 years for eyeglasses, $400/y HCSA (covers massage, acupuncture, nutritionist, etc.), $1500/y dental, fantastic Rx coverage, 1x/annual income life insurance, etc etc etc. - all of which costs the company less than what it costs the same company to provide basic insurance to their employees in the USA.

Sure, the employee pays more in income tax, but there's no lifetime maximum on claims, no 'taking a chance' and hoping you don't get sick, no gambling with your health period. For me that extra 6% I pay in income tax is well worth it.

Also, everyone pays the same price (through taxes), so big companies don't get any advantage from their stronger negotiating power.

OK, there's also private insurance (for stuff like dental, and private hospitals). But since companies aren't expected to pay it, it's more competitive.

We pay ~$100 - 200 / employee / month for dental & extended health care in Canada. I've heard of some startups in the US with older employees paying an order of magnitude more than that.

Benefits packages for employees are def cheaper :)

Not sure if this has been picked up anywhere else in the comments, but I find the Canadian university coop system prepares students there to be entrepreneurs better than anything I've seen in a U.S. university. This requires them to work in an actual JOB. As mentioned, Waterloo grads tend to be stellar, and our best intern to date came out of UBC in a coop (thank you, David Q, for placing him with us!).

Why don't U.S. universities run coop programs? My school fought like hell to keep students on campus. I guess they viewed work as destroying the "art" of liberal arts...

Thx Doug. For context, Doug runs TandemEntrepreneurs.com - The valleys leading mobile incubator/investors - which was extremely successful in it's first fund. So this is high praise.

On the main point of the article, I do agree that a lot of ideas fly higher in San Francisco than other parts of North America. I see "Highlight" as a good example of this where an app finds a lot of early adopters in a small area but it becomes harder for that kind of ubiquity to happen somewhere people aren't as fascinated by new technology like people outside of the valley are.

I believe that a number of communities like this end up being "geek ghettos" on account of this.

The author says he chose to start his company in Canada because, "In the Bay Area, investors, friends, and early adopters are so embracing and supportive of new ideas," and this can actually have bad consequences. It's an interesting notion. I have no startup experience, so maybe this is a dumb question, but isn't the solution just, "Take what investors, friends, and early adopters say with a grain of salt"?

Absolutely, that's fantastic solution, and what great entrepreneurs in the valley do. Unfortunately that's easier said than done ... especially given how pervasive the "buzz" can get.

> At the end of the day, my advice to Canadian startups is to stay in Canada

I think this can apply to many cities outside of the silicon valley bubble.

Yup, you're essentially right (I wrote the post). The gist of the article really could have been "Why you should start your startup outside of the valley" ... but choosing Canada has a few specific advantages I never really delved into with this post ...

I agree with so much of what you said in your article. I'm trying to make it in LA for a lot of the same reasons why you're working in Canada.

Not to be mean, but the author looks really young.

Maybe I'm getting old, but I find it really hard to take advice from such young people. My personal take is that they're bypassing a lot of the experience it takes to make a well rounded business person.

I personally feel like a douche trying to give advice to other people, particularly people older than me.

* Disclaimer - I wrote the post Thanks for suggesting I look young :)

I have a hard time taking advice from young people too. Well ... until Brian Wong, schooled me during a tech conference we were both panelists for.

A lot of super smart valley entrepreneurs "bypass" what it takes to be a well rounded business person ... I guess. But I doubt that has anything to do with age, and more to do with the current frothy acquisition and funding environment.

Thinking about it, I'm sure they can be just as good. Regardless of age. I would guess it's like anything else. Constant exposure and practicing will breed excellence. I would just be scared of all the mistakes they haven't made yet.

It's funny you mention Brian Wong, his company is a competitor of the company i work for. He's a smart guy, from what i can tell, but he would actually be one of the examples i'd use to cite lack of experience.

In software development, lack of experience can be a really big issue. For example, with lack of experience you may choose core piece of technology based on hype. coughmongodb and kiipcough

But, I digress, thanks for the article. Learned a bit about the Canadian start up eco-system.

"In software development, lack of experience can be a really big issue" can you explain this one to me? I hope that someone who calls themselves a senior developer with 20 years experience will know a lot about different technologies. On the other hand if you are a co-founder who needs to code, design, network and do many many other things, software development has nothing to do with it. Your demo will not be using the right technologies. Companies grow and new developers get hired. Code gets re-written and technologies you use, will be changed.

What is there to explain? As a software developer, experience matters.

If you're building disposable demos, you probably have more problems than building software.

There's a lot to be said 20~something entrepreneurs that don't know life before there was internet. Yes ... they're romanticized in tech blogs, and the majority of successful entrepreneurs are > 30 ... but when a young smart entrepreneur like Brian who doesn't know what the world looked like before the internet speaks ... I listen.

"Why Canadian Startups Should Choose Canada over Silicon Valley."

So the moral of the story is: if you are a first timer, do it in SV. Once you make enough connections from SV, do it in Canada.


Our visa is easier to get. :) (if you're in the US)

Why not s/Canada/New York/ ?-)

Because I'm not in New York! :)

Also, I originally wrote it out as s/Canada/(Portland|Austin|Raleigh)/ and then felt like NYC was conspicuously left out. And further realized those other cities could post for themselves.

Also you'd confuse sed, it would have no idea which one to replace with. ;)

That's true, I was taking literary license with sed. :)

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