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But there's no venture capital in Canada so it's nearly impossible to build a large tech company. Most successful Canadian startups sell out early because they

But there's no venture capital in Canada so it's nearly impossible to build a large tech company. Most successful Canadian startups sell out early because they know they'll hit major roadblocks. No capital plus a monopolistic telecom industry backed by government makes for a particularly hostile environment for small companies. Example: Kik got sued by Research in Motion IMMEDIATELY after receiving venture funding. The Canadian government actually encourages this type of anti-competitive behavior and does literally nothing to support any kind of small-business tech innovation. Any "technology innovation" tax incentives are geared toward saving oil companies billions of dollars per year, and do absolutely nothing to help small businesses. Canada is an absolutely horrible place to do a technology startup, I do not recommend it, this article does not change this fact.

karamdeep 15y ago
What a ridiculous statement. Don't get me wrong, there are a lot of challenges that entrepreneurs encounter when starting or scaling a business here, but it's time to stop using the crutch of VC/Government/Telecom interference to support the assertion that Canada is "an absolutely horrible place to do a technology start up. The bottom line is that if you still think this is the case, you haven't been paying attention to what's been happening over the past few years in this country. Do the names Fixmo, Shopify, Achievers, Accedian Networks or BeyondTheRack ring a bell? How about HootSuite or FreshBooks? A Thinking Ape, Vidyard, Allerta, Upverter, Enflick, GoInstant, Wave Accounting, Well.ca, Chango...the list goes on and on - all world class companies run by entrepreneurs who spend their time executing, not complaining. Radian6 and Q1Labs sold for almost $1B combined - is that large enough for you??? Last time I checked none of those companies were being sued by RIM, being squeezed out of SR&ED credits by oil companies or being held in check by Rogers/Bell/Telus. We (iNovia Capital) have even funded some of them, and are proud to stand behind them and every other entrepreneur in Canada who are working their asses off to prove you wrong.
- wavephorm 15y ago
  I am speaking from my personal experience. None of the Canadian investment firms, or incubator even replied to my emails, let alone give any reasonable valuation. The Canadian YC-copycat incubators seem more like vultures that scoop 25% equity for $50K in seed funding which is pretty ridiculous compared to what you can can get in the US. I was denied SR&ED and am currently in the process of receiving venture capital and moving my startup, and all the technology I've developed, to California far away from this abysmal environment.
  - abrichr 15y ago
    I think you need to distinguish between the types of startups that are encouraged in Canada and in the US. For example, the MaRS (Medical and Related Science) Discovery District (http://www.marsdd.com/ http://www.marsdd.com/) is the largest incubator of its kind in the world.
  - karamdeep 15y ago
    One bad experience should not tarnish an entire national ecosystem. There are incubators like GrowLabs and FoundersFuel who offer terms that are on par or better than YC, and there are investment firms that have invested hundreds of millions of dollars into Canadian startups over the past few years, and SR&ED claims seem to function smoothly for all our portfolio companies. I obviously don't know the details of your particular case, but don't mistake it for the status quo.
    - wavephorm 15y ago
      Well that's nice for them, but for me I’ve received a much warmer welcome from Silicon Valley, including first class flights, an office, and funding for several years of development.
    - ak2012 15y ago
      karamdeep perhaps everything looks great because you are on the other side of the table... and not creating a startup yourself...
  - reso 15y ago
    Canadian VCs suck, no question. That's why most good Canadian start-ups have investors from the valley.
    - karamdeep 15y ago
      Most Canadian start-ups that have investors from the Valley also have investors from Canada.
      - 15y ago
wwhchung 15y ago
Hi there. While I agree with some of your points, i.e. issues with certain large companies being anti-competitive in the startup environment rather than being supportive, and the fact that the tax incentives offered could be better structured to be more accessible to technology startups, I still think Canada is a great place to build a company. Why? Well: 1. Canada does have great tech talent. Finding them is a bit more difficult, but talent retention is much better. And if you reward your employees well (i.e. competitively with any other company out there), you can attract world class talent. 2. Building a great company does not necessarily mean raising a huge VC round. In fact, if you can build a business that is growing quickly without the need for VC, they'll come looking for you. One thing that some people get hung up on is that you absolutely need to get funded to start a company. That's not true at all. Although, when the time does come to raise money, most US investors are actually comfortable with investing in Canadian companies. There are a few things I do notice though. Canadian culture is a bit more conservative (i.e. less willing to take big risks, which also explains a bit of the lower valuation). It makes a bit of sense, since most of the larger industries are around 'traditional' sectors, like natural resources and finance. But this is changing. And as more and more successful tech companies emerge, the startup community will only get stronger. Also, the tax incentives are well intentioned, however the way they're structure has been a 'one size fits all' approach. The rules put in place make sense for some industries (e.g. medical R&D), but make it a bit inaccessible to tech startups without a lot of effort.
- potatolicious 15y ago
  > "Finding them is a bit more difficult, but talent retention is much better." As an employee this seems alarming to me. My impression of the Canadian tech scene is that you've got a small number of innovative companies with great work environments amidst a sea of sweatshops and incredibly mind-numbing code outfits. When your alternative is that, of course retention is better. For an employee it means you've essentially got them over a barrel. Don't rock the boat, don't ask for too much, because it's this way or work at some soul-sucking enterprise shop on Bay St. I'm not sure I can ever return to an environment like that, where my employer holds all of the cards and I hold practically none.

karamdeep 15y ago

What a ridiculous statement. Don't get me wrong, there are a lot of challenges that entrepreneurs encounter when starting or scaling a business here, but it's time to stop using the crutch of VC/Government/Telecom interference to support the assertion that Canada is "an absolutely horrible place to do a technology start up. The bottom line is that if you still think this is the case, you haven't been paying attention to what's been happening over the past few years in this country. Do the names Fixmo, Shopify, Achievers, Accedian Networks or BeyondTheRack ring a bell? How about HootSuite or FreshBooks? A Thinking Ape, Vidyard, Allerta, Upverter, Enflick, GoInstant, Wave Accounting, Well.ca, Chango...the list goes on and on - all world class companies run by entrepreneurs who spend their time executing, not complaining. Radian6 and Q1Labs sold for almost $1B combined - is that large enough for you??? Last time I checked none of those companies were being sued by RIM, being squeezed out of SR&ED credits by oil companies or being held in check by Rogers/Bell/Telus. We (iNovia Capital) have even funded some of them, and are proud to stand behind them and every other entrepreneur in Canada who are working their asses off to prove you wrong.

wavephorm 15y ago
I am speaking from my personal experience. None of the Canadian investment firms, or incubator even replied to my emails, let alone give any reasonable valuation. The Canadian YC-copycat incubators seem more like vultures that scoop 25% equity for $50K in seed funding which is pretty ridiculous compared to what you can can get in the US. I was denied SR&ED and am currently in the process of receiving venture capital and moving my startup, and all the technology I've developed, to California far away from this abysmal environment.
- abrichr 15y ago
  I think you need to distinguish between the types of startups that are encouraged in Canada and in the US. For example, the MaRS (Medical and Related Science) Discovery District (http://www.marsdd.com/ http://www.marsdd.com/) is the largest incubator of its kind in the world.
- karamdeep 15y ago
  One bad experience should not tarnish an entire national ecosystem. There are incubators like GrowLabs and FoundersFuel who offer terms that are on par or better than YC, and there are investment firms that have invested hundreds of millions of dollars into Canadian startups over the past few years, and SR&ED claims seem to function smoothly for all our portfolio companies. I obviously don't know the details of your particular case, but don't mistake it for the status quo.
  - wavephorm 15y ago
    Well that's nice for them, but for me I’ve received a much warmer welcome from Silicon Valley, including first class flights, an office, and funding for several years of development.
  - ak2012 15y ago
    karamdeep perhaps everything looks great because you are on the other side of the table... and not creating a startup yourself...
- reso 15y ago
  Canadian VCs suck, no question. That's why most good Canadian start-ups have investors from the valley.
  - karamdeep 15y ago
    Most Canadian start-ups that have investors from the Valley also have investors from Canada.
    - 15y ago

wwhchung 15y ago

Hi there. While I agree with some of your points, i.e. issues with certain large companies being anti-competitive in the startup environment rather than being supportive, and the fact that the tax incentives offered could be better structured to be more accessible to technology startups, I still think Canada is a great place to build a company. Why? Well: 1. Canada does have great tech talent. Finding them is a bit more difficult, but talent retention is much better. And if you reward your employees well (i.e. competitively with any other company out there), you can attract world class talent. 2. Building a great company does not necessarily mean raising a huge VC round. In fact, if you can build a business that is growing quickly without the need for VC, they'll come looking for you. One thing that some people get hung up on is that you absolutely need to get funded to start a company. That's not true at all. Although, when the time does come to raise money, most US investors are actually comfortable with investing in Canadian companies. There are a few things I do notice though. Canadian culture is a bit more conservative (i.e. less willing to take big risks, which also explains a bit of the lower valuation). It makes a bit of sense, since most of the larger industries are around 'traditional' sectors, like natural resources and finance. But this is changing. And as more and more successful tech companies emerge, the startup community will only get stronger. Also, the tax incentives are well intentioned, however the way they're structure has been a 'one size fits all' approach. The rules put in place make sense for some industries (e.g. medical R&D), but make it a bit inaccessible to tech startups without a lot of effort.

potatolicious 15y ago
> "Finding them is a bit more difficult, but talent retention is much better." As an employee this seems alarming to me. My impression of the Canadian tech scene is that you've got a small number of innovative companies with great work environments amidst a sea of sweatshops and incredibly mind-numbing code outfits. When your alternative is that, of course retention is better. For an employee it means you've essentially got them over a barrel. Don't rock the boat, don't ask for too much, because it's this way or work at some soul-sucking enterprise shop on Bay St. I'm not sure I can ever return to an environment like that, where my employer holds all of the cards and I hold practically none.