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The reason engineer salaries in Canada are low, especially for startups, isn't that companies are cheap. It's that there is no funding or support network for gr
by avaer 9y ago
The reason engineer salaries in Canada are low, especially for startups, isn't that companies are cheap. It's that there is no funding or support network for growing companies -- nothing compared to the valley.
In my experience seed funding in Canada doesn't mean "this idea looks like it's on a promising growth trajectory, here's 100K for a bit of equity to see what we can make of it". Instead it means "show us $500K in revenue and we'll consider you for a loan next year".
So what you have left are the smaller companies that happily feed their owner and not much else, or enterprise shops delivering established solutions in an established market for established rates (Canadian ones).
And the companies that do well and grow: they just move to the valley, because they generally can, and they have every reason to.
Source: I've lived both worlds.
- fnbr 9y agoYup. Or, it's "here's 100k for 30% of your company." I have a friend who has been trying to raise for his company, and the expectations that investors have in terms of how much equity they want is much worse than in the US.
- personjerry 9y agoEdit: Whoops, I read that as 100M :( That seems within reasonable bounds of a VC offer, am I wrong? If they expect to be valued much higher then they would probably be more well known (approaching unicorn realm) and would get SV interest anyway. And if they want to give less equity maybe they should find a earlier stage/smaller fund?
- avaer 9y agoObjectively reasonable or not, subjectively a joke in comparison to SV. This kind of investment won't pay for one additional hire this year; if you go smaller it won't even pay for the time you spent dealfinding. And after all of that, this level of equity is a curse on your books that locks you out of SV VC. So if you actually grow you're still disadvantaged by such an offer. Lose lose. We can debate whether such an offer is reasonable. But taking this offer in favor of seeking funding in the valley... that's unreasonable.
- personjerry 9y agoI misread as 100M, my bad!
- angerbot 9y ago> And the companies that do well and grow: they just move to the valley, because they generally can, and they have every reason to. Slack is a perfect example of this. They still have a small office down the street from me here in Vancouver, but they're based out of SF now. I can totally see why given the access to capital and talent in SF vs Van.
- 52-6F-62 9y agoAnd don't forget about the general attitude towards tech and tech workers here. Even digital media companies seem to see technology as something that happens outside them, and should just work. They have keep a handful of developers on hand because they have to, not because they want to. And then they're just the "computer guys". There's a significant bit of nerd stigma still. It's a bit outdated, that way. You're pretty spot-on with the support network, though. The federal government does offer programs at an increasing rate these days, but they're too few and can't do all the lifting. What surprises me yet is how we seem to have no shortage of digital design agencies in Toronto, but anything more technical seems to need to have enterprise money flowing in, or academic support. I'm generalizing, because there are edge cases, but it's certainly seems to be the mode.
- jonny_eh 9y agoI don't disagree with your points, but I'd like to point out Shopify as an exception. Started in Ottawa, grew, got VC funding, grew some more, IPO'd on NYSE, and is still headquartered in Ottawa.
- 52-6F-62 9y agoI call them and 500px the unicorns. They're usually the first two examples thrown out when somebody says something skeptical about the market in [Eastern] Canada / Toronto. Not that it's what you're doing. You're right, but still wanted it on the record that it's one of the few that's done so well. That said, I'm always happy to be proven wrong here!
- nasalgoat 9y agoThere's one or two of them, but they are hen's teeth. My startup has a $10M run rate after three years and the best we can do is get debenture and loan offers, no actual investment. Investors in Canada hate technology.
- jonny_eh 9y agoGet investors from the US then, that's what Shopify did.