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Comment by ornornor | Hacker News Reader

> mostly smoke and mirrors from the founders who were able to maintain their own lifestyles using grants from the Canadian government

This describes a surprisingly high number of companies I’ve worked at in Canada. These SRED credits keep afloat so many companies that should have otherwise perished and that won’t ever go anywhere.

You can even hire SRED consultants that will help you milk those credits as much as possible (for a fee of course). You can then apply for more credits to pay off these SRED consultants fees, as I understand it... While producing little to no commercial value, and coast on these for years.

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I’ve noticed the same thing. Have you found any good writing on this topic and how the American approach differs from the Canadian approach? I’ve been fascinated by this dynamic after spending most of my working life in the USA then returning to Canada, and just feeling like something is “off” whenever I talk to Canadian startups, and it feels like a lot of the time it comes down to the way the flow of investment differs here (especially in the R&D space).

imho it's not just the flow of investment. It's the smallness of the community. Many of the founders in the Toronto tech scene all know each other. From private school etc. At least when I was working for one 10 years ago, it all felt very incestuous and small.

Also in the US there's a real sense of having to hunt and compete for talent, but at least then in the Toronto startup scene you were to feel blessed for not having to work for a bank or insurance company, so put up the with the bullshit and dysfunction please...

This was one of the main reasons I left for the Bay area. I had a big network in Toronto but I felt like 5 years here I would be more talk than execution

Moved back two years ago and can echo this sentiment. We raised our most recently round exclusively in the US. Will be interesting to see how COVID-19 impacts all of this given how much more remote work will be available.

Before Google acquihired my team I ended up jumping ship to a NY based company from the Toronto startup I was at. Difference in culture was night and day.

With the increase in remote work availability I'd probably hunt for work from US companies at this point rather than beg for crumbs from Canadian startups.

> You can then apply for more credits to pay off these SRED consultants fees

Even better, many SRED consultants work on a contingent basis, i.e. they just get a fraction of your SRED refund!

Supposedly SRED accountants are some of the best paid in Canada, next to transfer pricing accountants.

SRED is a cargo cult thing mostly.

The American approach is to finance fundamental research that's just beyond what's currently possible and viable (take a look at the Apollo Program and the semiconductor industry or any modern DARPA challenge) while the Canadian one seems to be a kind of cargo culting of Silicon Valley where some non-technical civil servant looks for keywords in a form to grant money or not.

When I worked in a startup, just feeding the SRED consultant with info ended up eating hours and hours of time. The intent of the credit is for real foundational engineering research but the reality seems to be is that it ends up getting eaten by companies that are just applying existing tech in mostly non-novel ways, and consultants get to try to spin it otherwise.

It needs to be replaced.

Yes. Each company I worked for has spent many man hours and consulting wages on SRED. The claims were 100% BS.

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