Reasons to Start a Startup In Canada
mashable.com
mashable.com
1) Large number of the best developers leave. I doubled my salary moving from Toronto to the Bay area.
2) Silicon Valley (and NY) has smart money. Not to insult Canadian VCs, but the ones I've met are glorified bankers.
3) This is no longer true. The recent govt is increasingly unfriendly to immigrants.
4) In the bay area, everyone I knew (and their dog) was working on a startup. Toronto and Vancouver don't compare.
5) I am very jaded by the govt influence on R&D. This attracts the wrong sort of people. e.g. I've heard of consulting firms that will write your proposal and greatly increase your odds of success - all you have to do is give them a 25% cut. Frankly, the cost of creating a startup is low enough that if you believe in your idea/revenue generation potential, you should not waste time writing proposals.
2. Not sure on this not enough experience
3. It is trivial to get a visa for Canada to work, compared to US there is no comparison. Note that for Canadian citizens it is different in US (much easier)
4. Yeah thats true, Toronto probably has the biggest community and it is small in comparison
5. So true, the whole thing is a scam. I actually worked on couple projects where these consultants were used. It is embarrassing.
Just from my own circles - $125-150K base, with additional equity/bonuses on top, in NYC, for a bunch of nerds only 1-3 years out of undergrad. The range is similar in SF/SV. This is astronomical by "pretty decent" Toronto standards.
IMO the notion that NYC/SF/SV compensation eats Canadian salaries for lunch is not really that controversial nor ambiguous. I am easily earning over 2x what I would pull off in Toronto, or Montreal, or Vancouver.
[edit] There's an additional point of on top of this: Canada has essentially no major innovative software institutions. Google, Facebook, Microsoft, Amazon, et al act as anchors in their respective communities and their influence can't be discounted.
They attract talented people who actually give a hoot about the impact of the things they work on, and provide a talent pool for startups to draw from. They also act as a cushion against the risks of startup-dom, as most capable engineers have a (very decent) plan B.
The equation in the US often works out like "I can go work on a nimble team doing really cool stuff that impacts real people and possibly get rich. Even if we fail, I walk back into a 6-figure job working on really cool stuff still." - this has a tremendous impact on the startup scene, and simply does not exist at all in Canada.
Just doing some quick napkin math now - to maintain my existing NYC lifestyle in Toronto (and my current savings rate) I'd need to be in the $100-110K range. Who's heard of a guy 3 years out of undergrad making $110K in Toronto?!
EDIT: It is certainly not unheard of, but only for top graduates. Also, I see you were talking about equivalent 110k salary in Toronto which would be 130-140k in New York. This is a high base salary by any standard.
$110K 3 years out of college, at least in the current climate, is not at all uncommon in either NYC or SF/SV. It is not universal, but it's not rare either. If you look at the major investment banks, the institutional tech companies (see: Google), and the startups in NYC, this is the going rate for a mid-level engineer (i.e., $100-140K base). Hell, I have trouble finding fresh undergrads starting below $90K in these areas.
The point is, someone who is skilled at programming right now and has a few years of experience under their belt can very well pull at least $120K base, and even adjusting for cost of living differences, that's a hell of a lot more money than you can get in Canada.
In any case, this somewhat distracts from the point - it's not just about money. Myself and many other Canadian expats do not feel we can go back to Canada without working for the likes of SAP, IBM, TD, Royal, or any of the vast number of institutional enterprise companies that pound out rote, uninteresting code. There are some companies in Canada doing interesting work, but they are few and far between, demand for these jobs is intense, and job security sucks (after all, what incentive is there to treat you well when the employer knows they're the only interesting game in town?).
Compare with the SF/SV/NYC/SEA, where you can't throw a rock without hitting a row of innovative, interesting tech companies doing interesting things. We are hacking on interesting, immensely impactful things here, and we enjoy tremendous respect and security - after all, if management starts screwing around you hop down the street and go do something else that's interesting. The Canadian landscape looks incredibly bleak in comparison - a small handful of elite shops that everyone's clamoring to work for, and a vast tundra of code sweatshops where the problems are as uninteresting as the salary.
The challenge of course is politics, but that exists everywhere - Google has its own flavor (good luck using anything but Python, C, or Java, for example). Startups certainly have less politics, but just tend to be intensely personal affairs that revolve tremendously around the founder's personality and value system. Plus they tend to require commitments above and beyond what people that want families are able to provide. Large companies provide a much higher probability that you can have huge impact on people's day to day lives within a 5 year period, in my opinion - if you land the right project, with good management.
No question that people in their 20's should try a startup gig -- I moved to SF and NYC myself at ages 20 and 22, respectively (I dropped out to do it), and don't regret it. I even made a run back to SF at age 30 to try a startup again, this time as an executive (it failed). But I'm making more money now in IT because startups taught me how to get things done, which is an insight in very short supply in most large companies.
On the other hand, I haven't seen too many high-end SAP technical jobs that were "rote"... soul-sucking, sure, as you're working for the man, but still requiring a lot of brain power. I refuse to do it because I find more pleasure in torturing SAP consultants than joining them.
I've heard so much about how the grass is greener on the other side but it is not so easy for some of us to join in on the action. I have a bachelors in CS and two years of Canadian experience under the belt.
For example I've found indeed.ca to be very useful for locating job openings in most Canadian cities and http://www.grasmick.com/ was recommended to me by some expats.
First things first: get a LinkedIn profile if you don't have one already. Spruce it up, keyword it straight to hell - name drop pretty much every technology, field, and subfield you have substantial experience in. Almost all recruiters rely heavily (some would say exclusively) on LinkedIn for discovery, make sure you're positioned to show up in their searches.
Secondly, if you have friends in the Bay Area, Seattle, or NYC, they're probably being contacted daily by recruiters - tell them to send some your way. US recruiters may not be actively seeking out Canadians, but if a qualified one lands on their doorsteps I'm certain they would be pleased.
I have a recruiter I've worked with in the past I'm happy with (disclosure: I don't get any kickbacks or anything), if you want to contact me privately we can see if there's a fit there (email in my profile).
In case you are curious the situation here in Calgary (not a tech hub by any definition) is entirely different. The recruiters use similar tactics but the pool of working professionals is rather limited so you quickly develop a reputation. Sometimes you get the feeling that the it's the same players shuffling around a dozen employers.
The economics however are completely different because imo job opportunities are very limited. The base salaries you are describing for a recent grad (or American mid-senior level developer) are on par with middle management with approximately 15 years of experience.... So from a financial perspective it's really a no brainer many of peers who can leave are long gone. It's rather depressing but I almost feel like the Canadian education system is a farm team for American software companies.
The real trick in Canada (especially smaller markets like Calgary) is to be an independent contractor... talented guys pull in $95-110 per hour (minus 10-15% if you need a broker), $150-175 per hour or more if you're in a specialty with big demand. HR departments here lag the USA and can't accept what techs are worth.
Many brokers (i.e. corporations that handle administrative matters for you as an independent, such as liability or E&O insurance, invoicing & payment, etc.) are regional. The ones I deal with are in Western Canada these days, such as SI Systems, Brightspot, Inti Solutions, or Quadrus.
"HR departments here lag the USA and can't accept what techs are worth." You are referring to full-time work right?
Perhaps there may be some loopholes for new companies (aka startups), but I am not sure.
* Portable, cheap healthcare. A lot of people in the US don't join a startup due to the health insurance issue. The healthcare you get from a startup is not even close to what a big company can offer you.
* You're like me (no CS degree) and the US government doesn't think you look like an engineer. This can be worked around, but for me, the issue dogged me at almost every turn.
But yeah if it weren't for that there wouldn't have been much incentive to stick around.
The US Government, you mean.
Largely it was because they'd never done it before- US companies are very familiar with it. So, I left Canada and now live in the US.
Go to an info session to find out exactly what CRA's eligibility rules are. It is not that difficult to apply. Generally I have found their attitude to be "the money is there and we really want to give it to you -- because it comes from the taxpayer we just need to do due diligence that what you are claiming is in accordance with the tax act"
Can someone please elaborate on this one ?
Some time ago, this programme became limited to the specific list of occupations, with application limit per occupation and overall cap. And, software developers were not on the list. As of July 1st 2012, Canada temporarily stopped accepting applications until "early 2013" to implement some more changes.
After some Google-Fu I found the "proposed changes" you were talking about
http://www.cic.gc.ca/english/department/media/releases/2012/...
and yes, software engineering is not on the list
http://www.canadavisa.com/new-instructions-federal-skilled-w...
The best option seems to be PhD! One can apply for permanent residency two years into their PhD programs.
2) Yeah that's actually normal here (EU) too, not sure if the VCs in Silicon Valley are generally(!) different though? (question here :)
3) Was that different? I once applied via a someone who knew what he was talking about and he said if you are under 40 and have plenty of money it's a shoe-in, otherwise it sucks. This is 8 years ago.
4) I can see that, but so what? You want to meet great people or you want to meet great people at startups? Anecdote; I was standing in the supermarket in this 40 people (!) town in Spain and behind me was this old scruffy guy. I was playing with my s2 and he said something like amazing tech. He is a founder of a quantum computing texan company who goes here on vacation. I met more interesting ACTUAL good people here than in Berlin. I don't know about SV but I don't really care about wannabe's, I want to meet people I can learn from and/or start something with; in startup-mekka people have little experience and are engaged to be married to some crap anyway all the time. And cocky. Work for life, not money! It's all too short. I digress.
5) This is also a thing they have in most EU countries; big companies find it great as they do that paperwork anyway, small companies drown in the paperwork. I did a 6 year project like that and the paperwork took around 25% of the time. That doesn't sound like a lot but it REALLY doesn't benefit the research. Agreeing with the parent here; big companies use & abuse, small companies don't.
Money matters and Money is everything are two very different mindsets, and I doubt the GP is advocating the latter.
It is actually pretty easy -- you might spend a few days out of a whole year to pull it together, and get back back 2/3 of your R&D expenditure. Surprised that more start-ups don't go for this.
With SR&ED its possible to get back a substantial amount (like 2/3) of the money you invested into development. Another way of looking at it, is that it's like doing your development at offshore rates, except working with local talent.
In fact, it self-propagates: Fund your initial development, get back a portion via SR&ED, use that toward development, get back a portion via SR&ED etc.
Our start-up has really benefited from this, and frankly I don't understand why any company (big or small) who has an eligible project would not apply for this.
It is actually reasonably easy to find out what CRA is looking for, by attending a CRA public information session or two, and then filling out the paperwork yourself. Consultants "increase the odds of success" purely because they understand what the CRA is looking for -- but it really is not that complicated and can be picked up easily just by going to an info session.
If you can't be bothered to spend the time doing it yourself, then who's to say its not worth giving up 25% of the 2/3 you could get back.
There's also the IRAP program from NRC which can be good. I've used it quite a few times for small projects. If you qualify for the program, IRAP will match your companies contributions up to a dollar amount, for the approved project.
They don't care whether the outcome of this search is successful or not.
This means you have the incentive to risk the funds on such an endeavour, as you can get the credit despite your success or failure.
Risk real money, and you'll get a refundable tax credit with a chq in the mail.
Risk "virtual" money (e.g. accrue a salary that you might only pay out later provided you have sufficient cash flow), and you get credits that can be carried and applied in years when you had/have real money.
One of the implications, is that if things end up going sideways, you still have the option to e.g. switch your startup to doing something else (like contract work), apply the old credits to the new money and recover something of your risk.
I would recommend though that you go to one of the public info sessions held in your area, since there are various angles to be aware of, that will help you optimize your claim. For example:
- a small Canadian corp typically gets a better rate than a claim on personal tax;
- if you're a "specified employee" (meaning you own 10% or more of the corp) they place certain caps on things like how much of the "proxy amount" you can apply in your claim
- a lot of the claim revolves around how much of your expenses was for eligible work. You typically have to be careful that a founder who is also doing marketing etc, is only claiming for the portion of time spent on the R&D part.
They go into all of this in the public info sessions, and they typically have specialists from various SR&ED areas available to answer pretty much any question.
You can also call them on various info lines, e.g. they offer a "first-time claimant" service where they try to make it easier for people looking at doing a first SR&ED claim, even coming out to visit your business if helpful.
They also offer a "preclaim project review" service where they'll give you a prelim opinion on the eligibility of a project, without you having to file a formal claim. (While this is not guarantee, it can for instance be used while raising funding, to demonstrate to prospective investors that you have a reasonable expectation of getting SR&ED support).
In fact there are a lot of public info sessions coming up in the near future: http://www.cra-arc.gc.ca/txcrdt/sred-rsde/smnr-eng.html
How can someone receive a grant for something like that? (Or do you have to fudge the truth?)
1. Yes, a lot of folks who can't see past the dollars leave. I've done the math and for me to work in the Valley, I would need to make almost three times what I make, because I'd also be losing my wife's teacher salary as income (which is about 80% of my current salary). She also doesn't want to live in the U.S.—we happen to like our health care and the relative calm of Canada.
2. There are several startups in the space where I work (we are all at least partially funded by the same fund) and they're all pretty interesting.
3. Sadly, you're right about the Harper government's unfriendliness toward immigration. At some point, they will be turfed and saner immigration policies will be reinstated. Hopefully, someone will also have the political will to fix our shameful treatment of certain skilled immigrants as well (doctors should not be invited to Canada on the basis of their skills and then denied certification because the provinces have jurisdiction over said certification).
4. If you're in the right spots in Toronto, it's fairly easy to find startups. If you're not, it's harder. I suspect it's a bit like New York, where there's a lot of financial software development because Toronto, like New York, is the financial centre of its country.
5. I'm not sure what the government influence through things like SR&ED is…every company I've worked for that used SR&ED basically came up with submittable work based on what we did as part of our regular roadmap.
I'm quite happy to stay here and work for startups here.
While it is true that there are less companies you would expect would pay Bay Area size salaries, things have changed in Canada.
potatolicious told me to write this for the public good.
I work for Mozilla.
New grads, admittedly with co-op experience, get paid at least 90k+ with the same 30% bonus as all Mozilla employees, putting them in the 6-digit range mentioned in the thread.
Amazon recently opened an engineering office in Toronto, and Zynga has been here for a while, Google is in Kitchener, 1 hour away from Toronto.
A friend running a startup was complaining about the war for talent going on and was willing to pay salaries well in the NYC/Bay area range.
Food for thought?
While its true that employees tend to be less promiscuous as they can be in the peninsula, it is not true that developers do not have interesting work to do in Canada or that they won't be well paid.
While Mozilla has offices in Vancouver, I do not know enough about the city to talk about the situation there.
edit: missed part of a sentence. oops
Except that's a big reason why I left Canada to work in Silicon Valley.
It kinda went like this: "So you'll pay me 2-3 times what I could earn here, the weather is perfect, there's no mosquitos, and I can work on stuff people actually use? Where do I sign?"
I am considering checking out the states. I can always come back to BC later and earning some extra money would be good considering my loans. Job I have now isn't bad, low stress and 8-4 every day. pay is decent. Problem is that if I stayed here the pay would pretty much stay constant. Plus I hate living in northern BC.
If you want to be in Canada then do it in Canada. If you want to be in NY or SF or Idaho or Mexico then go do it there.
Nobody actually cares where you are, people truly love great product.
And the Qualified Small Business capital gains exemption means that your first $750,000 in capital gains is not taxed at all.
Also, on that topic, the Canadian controlled aspect of it can be undone by contracts you have with foreign shareholders, such as VCs. They can own < 50% of your stock but if they're deemed to have control by virtue of an option to acquire more stock or to force a sale, you lose the exemption.
I think people looking at it from the outside, or for the first time, easily feel intimidated ("its the taxman!").
The reality is that CRA does want to work with you -- e.g. if you go to the info sessions, you can talk directly to the actual people running the SR&ED program, and they genuinely want to reward innovation and help you maximize the money you can get out, while ensuring that taxpayers (who are footing the bill) are looked after.
For example:
- besides the salaries paid for eligible work, you can also also claim the proportion of certain overhead expenses related to that work. Or, you can just choose to use the "proxy method" where they basically take the eligible salaries and tack on another 65%. This can be huge, and people do ask the question: "that extra 65% may end up being way more than my actual overheads". CRA's response: the law allows you to pick either, so pick the one that provides the most benefit to your business.
- a CRA officer once mentioned to me that they were extremely frustrated by being unable to approve a particular claim where the work seemed good, but there was insufficient documentary proof. After many months of continually going back and asking "are you sure you cannot dig up any documentation", someone at the company happened to mention that there had been an internal email conversation thread about the work -- and this ended up providing all the documentation the CRA needed to approve the claim.
The cost of living is high in Vancouver. While the salaries offered are higher than Toronto, they are no where near SF.
I wonder if it would be worth it traveling to San Fran to test the employment market?
Staying out of the fishbowl is definitely helpful, and we've found some great traction in a market that has far less competition. I can imagine anyone in our target in SF will have 100 people knocking on their door to get them involved in a beta.
Canada is a great little greenhouse, and a warm pond to test, iterate, and evolve. If you can prove your product/market fit here, then you can look at the big ocean to expand without a huge risk on the cost of scaling.
We are building something big, a Numerical Data Search Engine outside the valley.