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Reasons to Start a Startup In Canada

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Re: Reasons to Start a Startup In Canada

#41

Post by pcc »

tluyben2 wrote: post #18
throwaway1979 wrote: post #4

I'm canuck and am very cynical about the startup space in Canada. 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 do…

1) Money is everything? Toronto no, but I would like to live in BC and I wouldn't care about the pay as long as I could live. We hire a lot of people who just want to be happy in a nice town and have a family. This 'all for money' thing is just shortsighted and naive. You will live to 95 and be sane for most(all) of it. That's not long and don't waste it. 2) Yeah that's actually normal here (EU) too, not sure if the…

Disagree completely about (5) in the context of SR&ED in Canada.

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.

Re: Reasons to Start a Startup In Canada

#43

Post by pcc »

comforteagle wrote: post #21
gavingmiller wrote: post #13

Earlier quoted context omitted.

re 5: SR&ED (the program I assume you're referencing) is 'free' money. If my company can make back 3/4 of a developers salary by doing "proposal writing" why wouldn't they do that?

Increasingly you get led down an endless paper trail of showing documentation, code reviews & ccra is now in the business of sicking auditors on claims to aggressively deny them. Wasted time & headaches.

This has not been my experience at all, over the past few years.

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"

Re: Reasons to Start a Startup In Canada

#44

Post by pcc »

crazycanuck wrote: post #17
bryanlarsen wrote: post #2

I may be a little bit cynical about the first 4 reasons, but the last one is very real. SR&ED tax credits mean that the Canadian government will fund 20-35% of your R&D as long as you do the paperwork (aka logbooks) and can stick it out long enough to have profits to apply the expenses against. These benefits are lucrative enough that failed R&D firms are sometimes purchased almost solely for their outstanding R&D ta…

Actually, you don't even need profits to apply the credits against. They are refundable, which means that if you didn't owe taxes to offset against, the government actually writes you a check in the amount of the credit.

And also it can work out to a fair bit more than 20 - 35% -- especially if you can use the proxy method for overhead expenses.

Re: Reasons to Start a Startup In Canada

#45

Post by nvk »

potatolicious wrote: post #11
tlear wrote: post #7

Earlier quoted context omitted.

1. Any numbers? Toronto you can get some pretty decent money. Also living in downtown with no car as opposed to driving everywhere in Bay area and paying crazy rent. It is not that clear cut imo. NYC is a better comparison probably 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 (m…

> "Any numbers? Toronto you can get some pretty decent money." 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.…

The amazing thing about T.O. is that the cost of living is a lot less so in practice you will have a lot more disposable income here in Canada.

Re: Reasons to Start a Startup In Canada

#46

Post by wrath »

pcc wrote: post #39
throwaway1979 wrote: post #4

I'm canuck and am very cynical about the startup space in Canada. 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 do…

Really surprised by all the negative comments around (5) here. 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, ge…

I totally agree the SR&ED is a huge plus for canadian companies. I've co-founded or been part of many successful startups in Canada and they were in part successful because of the SR&ED program. As long as you design and/or develop algorithms and software/hardware that improve canadian R&D you qualify for the service. $100k spent on the first year will give ~ $60K the next year, which you re-invest in R&D, and that gives you $36k the next (e.g. you double your origin $100k investment in two years), etc...

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.

Re: Reasons to Start a Startup In Canada

#47

Post by jmacd »

Who cares. Just build your startup wherever you WANT to be and I guarantee that you will have a better result than trying to do it somewhere you don't want to be.

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.

Re: Reasons to Start a Startup In Canada

#48

Post by serge2k »

jonny_eh wrote: post #5

"You don’t have Google and Facebook offering astronomical starting salaries for engineers right out of school" 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?"

A guy just left where I'm working to move down to the states. Makes around 2.5 times what he did here and gets extra benefits (apparently extra for living expenses and such).

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.

Re: Reasons to Start a Startup In Canada

#49

Post by crazycanuck »

pcc wrote: post #44
crazycanuck wrote: post #17

Earlier quoted context omitted.

Actually, you don't even need profits to apply the credits against. They are refundable, which means that if you didn't owe taxes to offset against, the government actually writes you a check in the amount of the credit.

And also it can work out to a fair bit more than 20 - 35% -- especially if you can use the proxy method for overhead expenses.

We just went through the process for the first time and landed right around 50%. Our claim was reviewed (this is typical for first time claimants), and while non-trivial the process was well-managed and clear. We did it ourselves instead of using a consultant, and they were very understanding of a few mistakes we made, helped us rectify them and sent us on our way. I don't know if this is typical, but I really can't complain; it seemed entirely fair given the dollars involved.

Re: Reasons to Start a Startup In Canada

#50

Post by [deleted] »

potatolicious wrote: post #32
bearmf wrote: post #16

Earlier quoted context omitted.

110k 3 years out of college is very rare in NYC as well. 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.

I'm certainly not a top graduate - I eked out of university with a 72% average. Neither are the other Canadian expats I know who are pulling this kind of cash - all are smart and hard-working, but none were among the top of their classes. $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…

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