Startup Visa Canada

Toronto, April 18, 2012 — Recognizing the importance of innovation and entrepreneurship as a driver of the Canadian economy, Citizenship, Immigration and Multiculturalism Minister Jason Kenney launched consultations today on whether to create a new and specialized program to attract immigrant entrepreneurs.

The announcement is the latest in a series Minister Kenney has made about transforming Canada’s immigration system into a fast and flexible system focused on jobs, growth and prosperity.

“Our Government’s top priority remains jobs, growth and long-term prosperity. Canada cannot afford to lose out in the competition for foreign entrepreneurs among immigrant-receiving countries,” said Minister Jason Kenney. “We need to proactively target a new type of immigrant entrepreneur who has the potential to build innovative companies that can compete on a global scale and create jobs for Canadians.”

Economic Action Plan 2012 highlighted Canada’s commitment to supporting entrepreneurs, innovators and world class research. It also announced the Government’s intention to build a fast and flexible economic immigration system whose primary focus is on meeting the new and emerging needs of the Canadian economy. This will include changes to Business Immigration Programs, which will target more active investment in Canadian growth companies and more innovative entrepreneurs.

Citizenship and Immigration Canada (CIC) intends to consult with industry associations in the development of a “start-up” visa program for innovative entrepreneurs in the coming months. Linking immigrant entrepreneurs with private sector organizations that have experience and expertise working with start-ups will be important as newcomers often require outside assistance in successfully navigating the Canadian business environment.

This “start-up” visa initiative is an example of the type of small-scale programs that would allow CIC to try innovative approaches to economic immigration. Under the proposed changes, the Government could create new, short-term programs under the Economic Immigration Class. These programs would be limited to no more than 2,750 applications per year and would end after five years. If a program proves successful during the five-year trial period and the Department wishes to maintain it, CIC would be required to formally introduce the new economic class in the Immigration and Refugee Protection Regulations.

“Our Government is committed to strengthening the immigration system to make it truly proactive, targeted, fast and efficient in a way that will sustain Canada’s economic growth and deliver prosperity for the future,” said Minister Kenney.

From the media release which can be found here 

We are pleased to have Vancouver Super Angel and Executive Director of GrowLab, Mike Edwards join the Startup Visa Canada team. In the past two years, Mike has done 45 investments in early stage startups in Vancouver, Montreal, New York, Silicon Valley, Europe and China. In his new role as ED of GrowLab, Mike will continue to search the world over to find and invest in the most talented entrepreneurs and encourage them to choose Canada as the best place to start and build their companies.

Startup Visa Canada: You’ve written a lot of cheques over the past two years, can you share a little bit about what you look for before inking the deal?

Mike Edwards: I invest really early in the cycle of a startup. Therefore, I can really only invest in one thing - the team. Before I cut a cheque, I try to figure out if the team I am about to invest in can execute, overcome adversity, stick together and continue to test the market with their product.

Most angel investors and micro VCs invest close to home, why are your investments spread out all over the place? 

I believe Innovation and Entrepreneuralism are universal. No country, town or region has a lock on these traits. I try to go to as many different geographic locations as possible, so that I am exposed to ample opportunities and the most talented entrepreneurs in the world.

On top of that - the more I travel, the more I learn. Ultimately, I can share new trends and apply what I learn to my existing portfolio and the teams that I work with at GrowLab.

You have lived in the US, Canada and Europe, do you see differences in entrepreneurial drive in various regions? 

On a personal level, I look at my son - who has clocked 100 ski days this year, enjoys holidays in Hawaii, and spends more time out of school, than in. Why would he want to change the world? His world is already pretty good.

Counter that with an aspiring entrepreneur, who I met in Istanbul or a team that I talked to in Bucharest with limited resources, they HAVE to and Want to change the world. They are hungry, talented and ready but they just need a bit of help and the right opportunity. Canada is a great soft landing for these talented, immigrant entrepreneurs. And accelerators like GrowLab can provide them with access to the capital, mentorship, and space they need to get setup and established in Canada.

Speaking of GrowLab, congrats on your new role as Executive Director! As the ED, are you actively looking to attract International teams?

Yes, we are actively seeking out international teams. We believe that having a diverse group of entrepreneurs in the cohort will benefit GrowLab, the Canadian startup community and create an interesting and dynamic alumni. 

What made you want to get more actively involved with Startup Visa Canada?

I think that Canada is a great place for international talent to land and build successful companies. We have access to capital, a diverse talent pool of employees and are just a short flight to Silicon Valley. If we are successful in reforming our immigration policies, we will create more jobs; specifically more creative jobs. And creative types tend to be active, interested in the arts, live close to work, eat out often and shop local, which contributes to a vibrant and dynamic community. 

Over two years ago, Mircea Pasoi and Cristian Strat (pictured above) wanted to come to Canada to start a company. They had great endorsements, previous accomplishments and credible investors lined up to give them money via the Bootup Labs accelerator program but Canada did not know what to do with these entrepreneurial immigrants. Getting here was easy but keeping these two in Canada while they built Summify was the impetus that inspired Danny Robinson to kickstart the Startup Visa Canada initiative.

Recently, we caught up with Danny to get the backstory on how he discovered these talented Romanian wunderkinds and what he went through to help them start Summify in Canada. 

SUV: How did you discover these Romanian gems?

Danny: In the fall of 2009, Bootup Labs (BL) used social media to put out a call for applications for its Winter cohort. Boris Mann and I were focused on finding the most talented entrepreneurs in the world and we used all of our social media channels and networks to get the word out. We were completely agnostic when it came to geography. Luckily, Mircea and Cristian heard about BL, applied to the program under the name ReadFu and were included in the shortlist Boris & I created.

Boris conducted all of the initial interviews via Skype. He loved the Summify team. They were two time Google interns, had won programming competitions in Romania and had a completely humble and willing to learn attitude. They had all the elements of what makes great entrepreneurs - a perfect storm, really. I wasn't crazy about their initial idea but Boris and I always said "we back the people, not the idea." So, we accepted them into the program.

But that was just the beginning, right? Can you share the Cole's Notes version of the long process you went through to help these entrepreneurs build their startup in Canada?

Right! Accepting them was the easy part. We knew that the immigration process would not be easy but we didn't expect it to be as challenging as it was. So, we told them "we don't know how the Visa situation will work out, but just get yourself here and we will figure it out."  

• Step 1 - Enter Canada with Business Visitor's Visa
  Cristian and Mircea entered Canada with Business Visitor's Visas, which did not allow them to work in Canada, even for their own company. Our first step involved working with lawyers and consultants to help us navigate the process. We thought we could benefit from their experience with the system but in the end, we went through one lawyer and two different consultants and were unsuccessful. Finally, Mircea and Cristian applied on their own. 
• Step 2 - Apply as employees of Bootup Labs
  We applied for both of them to work for BL as employees. Once the BL application was sent, I drove both of them to Seattle (not once, but twice!) to see if we could expedite the process in person. When they came back, we had to stop at the border to apply for an extension for their business visitor visa while we waited for the result of the work-visa application. The fear was that they would not even let us back in the country and Mircea and Cristian would be stranded in WA. Luckily, we got a nice officer at the Canadian border, who sympathized with our case and agreed to issue the extension.  
  
• Step 3 - Cristian Approved, Mircea Denied. Mircea Reapplies.
  Cristian was accepted and became an employee of BL. BL assigned all of the IP Cristian created while at BL to Summify. Unfortunately, Mircea's 1st application was declined and he had to reapply. I talked to an incredibly helpul PnP official on the phone. He really wanted to approve Mircea's application and tried to find a way to make it work but there was a specific part of the law that the officials could not get around, so they had to deny him again.  

• Step 4 - Approved
  Luckily, an other company had an open requistion for a lead developer listed for quite some time that matched Mircea's skill set. And because the company could honestly not find someone locally, Mircea was able to reapply for a position with that company and was approved.  In the end, they both were able to demonstrate a significant benefit to BC and were fully approved a month or so before Summify was acquired by Twitter. Ironically, when they moved to SF, US immigration issued them a work-visa instantly!

What surprised you about the process? 

In the short time they were here, Mircea and Cristian created 5 jobs and attracted significant foreign investment into Canada from top tier Valley VCs. It surprised me that they could NOT work for their own company, which was sufficiently funded and had money to pay them salaries. They were not a burden to Canadian society. However, their situation did not fit nicely into the current system, which requires that they be employed by an established company. I understand why it is set up this way and believe that is the right course of action for most immigration situations but Summify had credible investors, who were investing their money in the company. The investors, were essentially acting as "sponsors" to some extent. This is why we need to reassess the current system and come up with an alternate visa and process that specifically addresses technological entrepreneurial immigrant situations. 

Recently, Cristian and Mircea sold Summify to Twitter and moved South. Is this good for Vancouver? 

Do I wish that they stayed and built a biliion dollar company in Canada? Yes, and I hope they come back someday. But people have to understand that only a small % of companies created grow to become biillion dollar companies. In order to get those big anchor companies in Canada, we need to start more smaller companies. We can dramatically increase the number of companies started by enabling talented entrepreneurs like Cristian and Mircea to come to Canada to start their tech business.

Even though Summify was acquired by Twitter and moved South, the benefits to Vancouver are significant. Investors in Vancouver made money! Many were able to build up their profiles and bolster track record, which they can use to invest in more companies here and attract additional foreign investment to their funds. On top of that, Vancouver now has a higher profile in the global technology community and that will help attract more entrepreneurs to Canada. Specifically, the Romanian technology community thinks that Vancouver is a great landing pad and place to set up shop. Our hope is other international entrepreneurs will take note and consider Canada as a great place to start a company.  

Why do you care about Startup Visa Canada now?

This was not an easy process. I felt Mircea and Cristian's pain and realized we needed a better system in place to attract talent and encourage innovation in the immediate future. At the same time, I saw entrepreneurs in the US pushing for similar legislation. I knew that when the US opened their borders (which is inevitable), we would lose some of our best and brightest to our neighbors down South and would need to become more globally competitive to backfill that drain.

I care because I am an entrepreneur and Vancouver is my home. I don't want to see Canada left behind when the rest of the world figure's this out. At BL, we were agnostic of borders and as a result, we were able to find and attract Cristian and Mircea to Vancouver. Canada has an opportunity to lead this entrepreneur's arms race. We are nimble. We can implement legislation faster than other countries, like the US, but we need to act now.

Immigration is not a zero-sum game. A talented immigrant can spawn a cycle of shared economic prosperity by creating innovation that leads to the establishment of new industries, which in turn, creates more jobs, reduces unemployment rates and boosts an ailing economy. Suren Dutia, Kaufmann Foundation

It’s been a little over a year since Danny Robinson, Boris Wertz and I started working on Startup Visa Canada. Since we launched, our team has expanded to include other entrepreneurs and investors, who share our passion for this initiative and want to see an entrepreneurial visa put in place including:

• Chris Arsenault, iNovia Capital
• David Crow, Startup North
• Eric Brooke, Professional You!
• Mark MacLeod, Real Ventures
• Mike Edwards, Initio Group

Making Progress 

As you can imagine, initiatives like these take time but we are making progress. For starters, government officials are taking notice. In a recent Globe & Mail article, Citizen and Immigration Minister Jason Kenney said plans were in the works to replace the Entrepreneur Immigration program that they shelved last year:

We want the next Bill Gates or the next Steve Jobs. We want those folks with the brilliant ideas that are going to generate sustainable jobs for a long time to come,” Mr. Kenney said. “We want to create a policy which is more likely to attract entrepreneurs in areas like technology, energy and environmental innovations. 

It is exciting to see that all of our efforts and your support to date has helped reinforce that this is an important program, worthy of attention and action. In addition, we have met with Provincial leaders in BC and are in the process of setting up another meeting with Immigration Canada to discuss an alternative Business Investor Program in more detail. If the meeting is successful, I can only speculate that the next step would be for immigration Canada to assign a person and/or team to gather data to help them structure how a Startup Visa in Canada could work.

What Can You Do? 

1. If you have not already, please sign the petition. 

2. Tweet and blog about the initiative @startupvisaca

3. Send your local MP’s a message to express your support for Startup Visa Canada.

The most common country of origin for an immigrant founder of a top 50 venture-backed company was India, followed by Israel, Canada, Iran and New Zealand. Other founders and co-founders were born in Italy, South Africa, Greece, Norway, Germany, the United Kingdom, Singapore, Switzerland and France.

Through the companies they started the immigrant founders and co-founders have created an average of about 150 jobs in the United States. 

The full report written by the National Foundation For American Policy can be found here:

Today in BC, Premier Christy Clark announced the creation of the B.C. Immigration Task Force to review key government programs in order to increase the number of skilled immigrants and investors in British Columbia.

Please act now and add your comments to the BC Jobs plan forum http://engage.bcjobsplan.ca/ This could be a great opportunity to ask BC Government to pilot the scheme and once it succeeds the Federal Government could copy it.  We need to ensure there is a representative on the task force.

"We've laid out an ambitious plan to create jobs in the BC Jobs Plan and we will need skilled immigrants to help fill more than one million job openings expected over the next decade," said Premier Christy Clark. "The goal of this task force is to assess all of the immigration programs currently available to B.C., address their effectiveness and recommend ways to improve the current system so that British Columbia can successfully attract more skilled workers every year." 

The task force will be chaired by Richmond-Steveston MLA John Yap and will be made up of business and community leaders. The task force will examine the current system of economic immigration to Canada and B.C., including a review of: the Provincial Nominee Program, the Federal Skilled Worker Program, the Canadian Experience Class and the Federal Immigrant Investor Program. The task force will assess the outcomes and results of all the programs and explore opportunities through the New West Partnership to increase the federal government's responsiveness to immigration needs in Western Canada. 

Task force members will engage with employers, industry and sector associations, settlement service providers, community associations and other relevant groups. 

"The immigration task force is the first step in realizing our goal of a more efficient and effective immigration system," said Yap. "We know that people from all over the world with diverse skill sets and talents want to come to our province, and we want to do everything we can to bring them here so they can make British Columbia their new home." 

Work will start immediately and a final report to be made public will be submitted to the Premier by March 31, 2012. 

We are thrilled to announce that David Crow from Startup North has joined the Startup Visa Canada Team. David Crow is a technical marketer and product designer having built and shipped products for early-stage companies and has also lead grassroots entrepreneurial community efforts in Toronto including founding StartupNorth, DemoCamp, Founders & Funders and StartupCamp.

Startup Visa Ca: When we 1st launched the initiative, you were not as quick to endorse SUV as some of the other Canadian entrepreneurs we reached out to and challenged the provisions we proposed in a thoughtful post.  What made you change your mind and jump on board?

Dave: My initial concerns were directed around a lack of understanding of the difficulties faced by foreign entrepreneurs to get acceptance by Immigration Canada, and my other concerns were around the specifics of the changes to the Immigration Act proposed. When it comes down to it, I have been in support of inclusive Immigration Policy that favours the attraction and retention of foreign entrepreneurs. I know have a better understanding of the proposed changes thanks to the educational work that you at Bootup Labs and Boris Wertz have done regarding the specific changes to the Act.

You have said that if Startup Visa was available in the US when you were in Austin and SF in 1998, "I would never have returned to Canada."  What made the States so attractive?

It was a combination of the American dream, the ludicrous nature of compensation during the first Internet bubble, and that most of my recent friends and colleagues were from the US. This meant I had a strong network of connections that were working or starting companies doing very exciting work and they were able to pay market rate salaries. The opportunities in Canada paled in comparison. There wasn't a lot of press coverage, the advertised salaries seemed low, and the thought of working for a bank was unexciting. In the US you could start a company, raise money and change the world. Part of this may have been my naivety, but it was exciting and I was able to understand the immigration rules enough to stay. 

As you know, Startup Visa Canada was inspired by and somewhat modelled after the US initiative.  You commented in your post about a better definition of qualified funding sources.  Do you have any thoughts on how we should qualify investors?  Do you think $150,000 is enough/too much of an investment?

The model proposed in the US is clean. It offers clear changes to the immigration laws that make it easier for US investors and foreign entrepreneurs to gain entry to the US. The challenges I see with the Canadian proposal are related to the existing Immigration Act that provides provisions for foreign entrepreneurs and the lack of definition related to qualified funding sources. The Federal Government has provided a definition for qualified Canadian funding in the FedDev Ontario Business Innovation Guidelines that defines qualified as "registered with the National Angel Organization or Canadian Venture Capital Association". It needs to provide a mechanism to encourage Canadian investment and manage risks associated with interpretations of immigration rules. I am not sure that this is the best definition for "qualified investor" but it is one that the Federal government has accepted in the past, and in light of another description it appears to be adequate.

The other opportunity is to provided further clarification around immigrant equity ownership as related to the investment dollars, particularly in future funding rounds and acquisitions. 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.

The $150,000 minimum investment is a good reflection of the changes related to the capital required to start an early stage high technology company, it leaves the opportunity for Canadian angel investors to attract and invest in very early-stage companies and entrepreneurs. I don't have any issue with the $150,000 minimum.

What do you think will happen if the US Startup Visa gets approved before Canada? 

Canada is a very attractive country. We consistently rank high in many of the surveys for quality of life. The safety, security, access to healthcare, education and other services. Being in very close proximity with easy access to the US market makes Canada a very attractive place. We need Startup Visa to compete with the US. If the US is successful in approving the Startup Visa initiative the attraction of entrepreneurs to the US based on availability of capital, existing innovation hubs, and large publicly traded companies for mergers and acquisitions will make it difficult to attract foreign entrepreneurs to Canada. It will make it difficult to retain existing Canadian entrepreneurs. We need to build an inclusive culture of entrepreneurship as a career path, and support entrepreneurs be they Canadian or foreign born to build world class enterprises in Canada. Startup Visa Canada is one part of the necessary culture to keep Canada competitive on a global scale.

You can read more about David Crow and his thoughts on entrepreneurship and technology on his personal blog or on Startup North.  For daily musings and insights, be sure to follow Dave on Twitter.

Mark MacLeod, a Partner at Real Ventures in Montreal and an advisor to many great SaaS startups was one of the first people to endorse and support the Startup Visa Canada Initiative when we launched. We caught up with Mark over the weekend to find out more about his roots and why he has been "solidly behind" the initiative since the get go.

Startup Visa Canada: We read that you moved to Canada when you were a "wee lad." Where are you from and what brought you to Canada?

Mark MacLeod: I emigrated to Canada from Scotland in December 1981. We lived in a tiny town (Stornoway) on a tiny Island (Lewis) 2 hours from the Scottish mainland. When we left, one of out every three adults was unemployed. We left so that my sister and I could have a better future. Mission accomplished!

How long have you been working with Startups in Canada?

I have been in finance for 21 years. Since 1999 I have been part of the startup World. For the 1st 11 years, I was CFO for a number of venture-backed software companies, most recently doing several at a time under StartupCFO. In October last year, I moved to the investment side joining Real Ventures. I still continue to advise some great startups.

Why were you one of the 1st people to endorse this initiative?

Because as an immigrant I see how great our country is. I am lucky to be here and want others to have the same opportunity.
 
Why do you think Canada needs a Startup Visa?

We are a resource-based economy. The strength of our banking sector is tied to resources. We need more. Technology and knowledge-based industries are the answer. According to our friends at C100, 30,000 Canadians are now living in the Valley in the tech sector. That is a tremendous asset for us to leverage. But in order to do that fully and in order to realize our potential we need more talent.

At Founder's Fuel, what % of applicants are International? 

I would say < 10% of our applicants were European. We had quite a few from the U.S. None of the final 9 were from out of the country.

What do you think will happen if we do implement a Startup Visa in Canada?

It would be a big asset in helping us attract talent. For hi-tech specifically Canada is blessed to be right next door to the largest tech market, venture market and largest pool of tech acquirers in the World - the United States. This proximity can be a big draw for companies and people alike.

Also, and this is a bigger topic: we need more big tech companies that stay here and go public.  We need more talent of all types to make that happen.

Finally, I'm biased: most everyone I know that emigrated here hustles pretty hard. I don't know if it's because of our modest roots, or that we feel lucky to be here or all of the above. But whatever the cause, we need more of it.

To connect with or learn more about Mark, you can read his blog, follow him on Twitter, check out his About.me Page or visit the Real Venture's Website.

When polled 72% of Canadians stated that Canada needs to stay ahead of the US in attracting entrepreneurial talent and two-thirds of Canadians (66%) think the US have the right idea with the Start-up Visa Bill. *

The Canadian start-up visa campaign wants to upgrade the immigration program to make it easier for people who want to create science and technology companies in Canada by reducing the funding needed to enter the country on the conditions that they have Canadian investors and create new jobs within a couple of years.

Eric Brooke, a campaign spokesperson  “The end result should be more jobs for Canadians, stronger economic growth and a larger number of science and technology companies in Canada both large and small”

“There is a opportunity here for Canada to get ahead of the game, as the US political system does not seem to have the collective will to take this issue by the throat and encourage technology or science entrepreneurs from other countries to create businesses and jobs in the US.

Boris Wertz, an investor and co-founder of GrowLab “ Its worth remembering that 52.3%** of start-ups in the Silicon Valley are founded by immigrants, with an effective start-up-visa program maybe we can convince foreign entrepreneurs and job creators to build their companies here in Canada instead of the US.  We are already falling behind countries like Chile, Singapore and Britain who have already upgraded their programs, but I believe we can learn from their programs and make ours better.”

One of Canada’s’ leading venture capital associations (CVCA) is onboard with the idea. “The direct experience of a number of our member funds that have been launched by immigrants in Canada; these funds have made enormous contributions to our industry as well as to portfolio companies and to the economic well-being of Canada” said Chris Arsenault, Director at CVCA.  “Our belief that we must promote a culture of entrepreneurship in order to successfully compete in the new global economy; Canada can become a beacon, attracting the best and the brightest from across the globe”

Danny Robinson, BC Innovation Council member, Entrepreneur and investor believes there is an opportunity for the provinces to step up. “It seems to me there is a possibility for one of the provinces to create a pilot using their Provincial Nominee Program (PnP).  I believe the province that upgrades their PnP first will be able to pick the best entrepreneurs. ”

Notes

In a poll conducted by Vision Critical conducted on the Angus Reid Forum, earlier this year the following results were found:-

1. A large majority of Canadians believe Canada could become a real hub of entrepreneurial activity in North America with the right policies in place (86%) and 72% think Canada needs to stay ahead of the US in attracting entrepreneurial talent.
2. Two-thirds of Canadians (66%) think the US have the right idea with the Start-up Visa Bill being introduced, with 72% agreeing that it will attract entrepreneurs to the States and 70% seeing that there could even be a risk of attracting Canadian talent as a result.
3. Just over two-thirds (68%) would support a Start-up Visa being introduced in Canada. (Almost three-quarters of those with University upwards education, 74%)
   1. The majority of Canadians agree that securing Canadian investment is a reasonable alternative to requiring large sums of money in personal funds, and approaching half, 44%, realise that most start-up entrepreneurs would not have $300,000 in personal funds as per current requirements.
   2. Half of those with university education upward agree that current processing times are too long.
   3. Three-quarters of Canadians believe that the entrepreneur should retain at least a third of the equity in the business.

** 52.3% is from the following report page 10 table 4

To the taxi-driver-with-the-PhD, add a new metaphor for Canada's immigration system – the entrepreneur with the one-way ticket home. People who don't have the capital themselves, but can prove there is money (and the promise of job creation) behind their idea, should be welcomed to Canada, and this country needs to consider rule changes to let them stay.

The rest can be found here on the Globe and Mail website.