Photo by Eduardo Zarate
Canada is a great country. One of the defining characteristics are the forward looking immigration policies that appeal to educated potential immigrants.
Danny Robinson (@dannyrobinson), Maura Rodgers (@maurar), Boris Wertz (@bwertz) started StartupVisa.ca as a response to the StartupVisa.com created by Eric Ries, Dave McClure, Shervin Pishevar, Brad Feld, Paul Kedrosky, Manu Kumar, & Fred Wilson in the US. The goal is to modify existing Canadian immigration policy to expedite the process for entrepreneurs and change the “minimum net worth of C$300,000 that was obtained legally” to include provisions for “Canadian funding of $150,000”.
Danny was giving me a hard time the other night because I have not signed or blogged about the StartupVisa.ca efforts (unlike Mark MacLeod, Financial Post, HackerNews, NextMontreal, TechVibes and others). I agree with the efforts in principle. I think changing the immigration policy to be more entrepreneur friendly would help Canada. My issues centre around the wording of the proposed changes. I am not policy writer, I am not a policy wonk. But it feels like the proposed changes do not meet the requirements of good policy. This is where the proposed US legislation feels more robust and complete. The provisions of the existing Entrepreneur program are great and include:
- You must control at least one-third of the equity and actively manage a qualifying Canadian business for at least one year after becoming a permanent resident.
- The business must have created the equivalent of at least one full-time job (1,950 hours of paid employment) for a Canadian citizen or permanent resident (other than yourself and your dependants)
I would like to see provisions that include:
- a better definition of “qualified Canadian funding” – we’ve seen attempts at this in the past including FedDev efforts for Southern Ontario, the goal is to specify funding sources to avoid potential immigration challenges of related to regulating potential groups of investors
- further clarification about immigrant equity ownership as related to the investment dollars. Currently the criteria includes a definition of ownership of a Qualifying Canadian business as defined by meeting any 2 of the 4 presented criteria around ownership, net assets, sales, income or jobs. It is unclear how the impact of pre- and post- money valuations potentially have on the ownership requirement. My concern is that including further investment could dilute the entrepreneur and make them ineligible according to the sales or ownership criteria already defined in the immigration policy.
I was also curious at the substantive change from $300,000 to $150,000. This reduction is fairly significant. The only reason I can think is that the proposed changes are about investment per person and not corporate investment. My guess is that this requirement is reduced given anecdotal evidence of current entrepreneurs and investment levels in their company from a single angel investor, i.e., this is the investment amount in the company divided by the number entrepreneurs to get $150,000. It’s just unclear how this number was derived.
So I agree with the efforts of StartupVisa.ca crew even if I think their proposal is a little too simplistic to actually function and requires the support of policy and immigration wonks (of which I am neither). What can you do? Read the Open Letter Regarding Startup Visa Canada and if you agree endorse the petition.
David, thanks for shedding some light on this. As an immigrant myself I fully support this concept. I have not studied the US language in detail nor done the comparison you just did. I fully expect that should the government engage the community and react to the support for this concept that all these details (and many more) will be worked out. But in principle, I am solidly behind it.
David, thanks for shedding some light on this. As an immigrant myself I fully support this concept. I have not studied the US language in detail nor done the comparison you just did. I fully expect that should the government engage the community and react to the support for this concept that all these details (and many more) will be worked out. But in principle, I am solidly behind it.
I completely understand. I was a immigrant in the US. I studied on an F1 visa, then an TN-1 and H1B and I applied for Green Card (permanent resident) status. But I chose to return to Canada before completing my Green Card status.
I think the Startup Visa program is a great idea. We should actively be encouraging new entrepreneurial immigrants and tying it to “qualified Canadian funding” is great.
I completely understand. I was a immigrant in the US. I studied on an F1 visa, then an TN-1 and H1B and I applied for Green Card (permanent resident) status. But I chose to return to Canada before completing my Green Card status.
I think the Startup Visa program is a great idea. We should actively be encouraging new entrepreneurial immigrants and tying it to “qualified Canadian funding” is great.
David, thanks for your support and good points you raise – I think we never intended to present a fully-baked concept but start the discussion by launching the initiative. Our hope is to raise enough awareness to get politicians interested in this topic which is so crucial for the competitiveness of Canada going forward.
David, thanks for your support and good points you raise – I think we never intended to present a fully-baked concept but start the discussion by launching the initiative. Our hope is to raise enough awareness to get politicians interested in this topic which is so crucial for the competitiveness of Canada going forward.
It put me off as a little “me too” after the great work of folks in the US. I understand both the desire to get there first but it just turned me off a little.
I think it is a great effort and I hope that we can convince Minister Clement and others to enable Canada as a destination for foreign entrepreneurs.
It put me off as a little “me too” after the great work of folks in the US. I understand both the desire to get there first but it just turned me off a little.
I think it is a great effort and I hope that we can convince Minister Clement and others to enable Canada as a destination for foreign entrepreneurs.
From a Canadian entrepreneur’s perspective: I need a way to guarantee the talent I’ve recruited abroad that they will be able to obtain a permanent residency by joining me in launching a startup here.
And preferably, I’d like to do it without necessarily giving up a huge chunk of equity in the process. So I see the 1/3rd stipulation as a deal breaker. Even if the immigrant is a co-founder, we may already have two other founders + investors that have equity stakes. Even if we could accommodate giving him or her 1/3; it may effectively kneecap future capital investment.
Anyway, I agree with David – equity ownership needs to be more clearly defined – and I would add, the amount of equity required to qualify should be significantly lower.