Why are entrepreneurs leaving the U.S.? • Hacker News Board

Re: Why are entrepreneurs leaving the U.S.?

#51

Post by geebee » Wed, Nov 30, 2011, 9:48 PM UTC

potatolicious wrote: post #44

OmarIsmail wrote: post #25

Earlier quoted context omitted.

> Canada is generally regarded as a terrible place for startups, unfortunately. The laws are pretty restrictive towards "disruptive" technologies and the government always bends in favour of the existing players. What the heck are you talking about? Can you please provide some sources for this? Other than telecom and media I can't think of any space in the tech industry that the government is "restrictive" towards. I…

Canadian expat here. You missed one thing: a dramatically smaller talent pool. The brain drain for coders from Canada to the USA is immense . It's not a trickle, it's a full-on broken dam. I'm making easily double here what I would in Canada, even if you account for tax and cost of living. Software engineers, in general, simply don't get paid well in Canada. The ease of securing a TN visa also means that there is eff…

Do you have any idea why coders are paid so much less? Is it because all professionals are paid less (ie., are lawyers, physicians, etc all paid less in Canada)? Or is this more of a regional pattern combined with a cost of living (ie., coders are paid less in Wisconsin than in California, but might live better on what they do earn)? Or is it maybe related to productivity, that coders in these concentrated areas are able to be so much more productive than they are elsewhere that they're simply creating more wealth...

Anyway, would be interested in hearing the thoughts of a Canadian expat on this one.

Re: Why are entrepreneurs leaving the U.S.?

#52

Post by CWuestefeld » Wed, Nov 30, 2011, 9:50 PM UTC

billpatrianakos wrote: post #4

There may be a few stories like this but this is the exception, not the rule. As much as we have problems here in the states, it's still one of the easiest places to start and run a business (#4 in the world). I didn't quite get why the guy in the story left for Korea though. It was just a story of an entrepreneur who left the states and is now S. Korea's Zuckerberg. So? I mean, it's impressive but so what if he left…

while we are decently regulated those regulations don't do much to Hirt the founding of a business and allow businesses to expand easily.

On the contrary, consider:

[beginquote] In the wake of Sarbanes-Oxley legislation ..., "the psychology of the entrepreneur has changed dramatically," say Mark Heesen, president of the National Venture Capital Association. The basic reason is that in a world with Sarbanes-Oxley, everyone who wants to take their company public has to deal with extra paperwork and hoops to jump through. Those costs can add up and sometimes make going public simply not worth it. [1] [endquote]

For further details on this, see also [2]

[1] http://money.usnews.com/money/blogs/risky-business/2008/07/1...

[2] http://www.nysscpa.org/cpajournal/2006/606/infocus/p14.htm

Re: Why are entrepreneurs leaving the U.S.?

#53

Post by duopixel » Wed, Nov 30, 2011, 10:08 PM UTC

davidw wrote: post #46

nirvana wrote: post #23

In several of the comments, people have asked why entrepreneurs might want to leave the USA, given the common perception that the USA is a great place to do a business. I'm making this comment in response to those questions as an example of an entrepreneur whose left the USA. My reasons for doing this are obviously going to be different than those who would choose not to, so don't get mad. I'm not trying to persuade…

> Pick whatever examples work best for you We have a black guy as president. That simply would not have happened even 20 years ago. At protests, even relatively minor nastiness by police is filmed and broadcast immediately. Look up what the police did in some places in the 60ies as a comparison. We have the internet to get information out about various things. It's easy to see and complain about the bad things, and r…

It's worth mentioning that the CIA did everything they could to prevent that "communist guy" from being elected and govern peacefully, and once his government was overthrown it offered all its support to that "brutal dictator", by their own admittance https://www.cia.gov/library/reports/general-reports-1/chile/....

Re: Why are entrepreneurs leaving the U.S.?

#54

Post by quanticle » Wed, Nov 30, 2011, 10:13 PM UTC

hello_moto wrote: post #41

quanticle wrote: post #26

Earlier quoted context omitted.

>You kind of need a "Yes-Man" if you're on early stage of startup inventing your own dream (I'm sure this is going to open a can of worm but hey... it's your startup). Nonsense. You are not smart enough to run your company. That bears repeating: You are not smart enough to run your company. In other words, you will face unexpected challenges and problems that you aren't smart enough to solve on your own. In a situati…

It's hard to argue because I've seen many companies/businesses that start that way back home or in Asia. Only later on when they're stable enough to hire smarter people then they start to delegate. YMMV. As I said it before, it's one of the reason why people want to go back regardless whether I'm wrong or you're right. It's the worst place for you but not necessary for other people. Different culture but I haven't se…

>Different culture but I haven't seen China nor South Korea fail so far :).

It's also the reason they haven't made any major inventions or advances. The yes-man culture is positively noxious to innovative thought, and if you look at Korea right now, they're trying to loosen up that culture so that they can innovate and don't get stuck in a role of constantly receiving secondhand innovation from the US/Europe.

Re: Why are entrepreneurs leaving the U.S.?

#55

Post by kerryfalk » Wed, Nov 30, 2011, 10:49 PM UTC

geebee wrote: post #51

potatolicious wrote: post #44

Earlier quoted context omitted.

Canadian expat here. You missed one thing: a dramatically smaller talent pool. The brain drain for coders from Canada to the USA is immense . It's not a trickle, it's a full-on broken dam. I'm making easily double here what I would in Canada, even if you account for tax and cost of living. Software engineers, in general, simply don't get paid well in Canada. The ease of securing a TN visa also means that there is eff…

Do you have any idea why coders are paid so much less? Is it because all professionals are paid less (ie., are lawyers, physicians, etc all paid less in Canada)? Or is this more of a regional pattern combined with a cost of living (ie., coders are paid less in Wisconsin than in California, but might live better on what they do earn)? Or is it maybe related to productivity, that coders in these concentrated areas are…

I can't answer this question with a very high level of confidence for all of Canada (I'm based out of the prairies) but my current feeling is simply that the quality of the positions are lacking, as the parent has pointed out.

There's a view that programmers are code monkeys. If looked at from the perspective of a manager within the manufacturing industry (Many of Canada's high net worth individuals, especially in my city, have some sort of manufacturing/hard goods background) programmers are high level production staff.

As a result the jobs generally aren't very exciting and don't pay much. Mechanical Engineers are more sought after in my city, at least.

Six figure jobs seem to be within smaller boutique firms and a few of the big companies but it is far from the norm and there aren't many of those to choose from. Programmers earning more than $150k are virtually unheard of, as far as I know. My knowledge could be inaccurate here though so please take it with a grain of salt.

To change it would mean more jobs of a different nature. Startups are the only solution I currently see to change that long-term. And we have many other issues to contend with beyond a smaller talent pool and scarce funding.

I think it'll take a few big wins by a few entrepreneurs with, as my lawyer likes to put it: "balls of steel", to be willing to stay in their local Canadian markets for there to be progress in making this a better place for software engineers and in turn, other startups.

I am starting to notice a slight change and some locals urging me to stay local. Perhaps there's hope for the future.

So to try and succinctly answer the question, I think the pay reflects how interesting the jobs are, unfortunately.

Re: Why are entrepreneurs leaving the U.S.?

#56

Post by wtvanhest » Wed, Nov 30, 2011, 11:13 PM UTC

CWuestefeld wrote: post #52

billpatrianakos wrote: post #4

There may be a few stories like this but this is the exception, not the rule. As much as we have problems here in the states, it's still one of the easiest places to start and run a business (#4 in the world). I didn't quite get why the guy in the story left for Korea though. It was just a story of an entrepreneur who left the states and is now S. Korea's Zuckerberg. So? I mean, it's impressive but so what if he left…

while we are decently regulated those regulations don't do much to Hirt the founding of a business and allow businesses to expand easily. On the contrary, consider: [beginquote] In the wake of Sarbanes-Oxley legislation ..., "the psychology of the entrepreneur has changed dramatically," say Mark Heesen, president of the National Venture Capital Association. The basic reason is that in a world with Sarbanes-Oxley, eve…

If your concern is going public then you have successfully grown a business to a gigantic and reasonably stable level and have beat all the odds. You have therefore picked the correct country.

While Sarbanes-Oxely does pose a financial burden on companies which is still too high (typically $1M to $3M/year), it does provide a level of protection for employees of those companies, bond holders and mutual funds which hold most of America's retirement money.

Paperwork and hoops for going public are handled by accountants and attorneys.

Sarbanes effectively removed corporate governance issues which cause huge problems (like having a captured board or having the audit firm also being paid for consulting etc.

The citations you cited are written by The National Venture Capital Association who lobbies against Sarbanes because it affects their returns. In fact, 69% of NCVA dues go to lobbying.

"We estimate that 69% of your dues will be used for lobbying and is not deductible because of recent changes in federal tax law." http://www.nvca.org/index.php?option=com_content&view=ar...

The second article you cite has the following quote: "Despite the many chilling headlines and reported cases where companies have cited SOX as the reason to shelve plans for an IPO, the evidence to date that SOX is sufficient cause for companies to stay private has been largely anecdotal or limited in scale."

--- All that said, SOX is too expensive and the D&O insurance should be reduced to increase public company valuations and IPO valuations. It does represent an unintended burden on shareholders, CEOs, Bond Holders etc. but SOX is overall positive in the sense that it minimizes fraud and reduces risk for all stakeholders including non management employees.

Re: Why are entrepreneurs leaving the U.S.?

#57

Post by tomkarlo » Wed, Nov 30, 2011, 11:17 PM UTC

Amazingly, if you have thousands of entrepreneurs, some of them will go to other countries. I'm sure there's also some examples of South Korean entrepreneurs coming to the US and starting businesses here. I've worked with some guys who came from Taiwan and started multi-billion-dollar US ecommerce businesses.

Are either of those necessarily trends? Not unless you can come up with some numbers to support the anecdotes, which this story doesn't seem to have. We don't know if entrepreneurs are leaving at a greater rate than before, or even if there's a net loss (lots of people come to the US and end up starting small businesses.) If it's in the story, I missed it.

Re: Why are entrepreneurs leaving the U.S.?

#58

Post by spitfire » Wed, Nov 30, 2011, 11:26 PM UTC

quanticle wrote: post #26

hello_moto wrote: post #20

Earlier quoted context omitted.

It's not as bad as you'd think. These best practices are just the foundation, not necessary the long-term solutions. Once you have a set of standard, there's always room for improvement or changes. The biggest problem with N.A. workers is that they can be categorized into 3 types when it comes to "Do Things": - Do as they pleased (cause they think they know it all) - Follow the best practice - Follow the latest and g…

>You kind of need a "Yes-Man" if you're on early stage of startup inventing your own dream (I'm sure this is going to open a can of worm but hey... it's your startup). Nonsense. You are not smart enough to run your company. That bears repeating: You are not smart enough to run your company. In other words, you will face unexpected challenges and problems that you aren't smart enough to solve on your own. In a situati…

He might not be smart enough to run his company. But I've seen more than a few people who aren't smart enough to run a company, but are lucky enough to hit payday.

Sadly, this sort of failing upwards just reinforces their world view.

Re: Why are entrepreneurs leaving the U.S.?

#59

Post by billpaetzke » Wed, Nov 30, 2011, 11:32 PM UTC

nirvana wrote: post #23

In several of the comments, people have asked why entrepreneurs might want to leave the USA, given the common perception that the USA is a great place to do a business. I'm making this comment in response to those questions as an example of an entrepreneur whose left the USA. My reasons for doing this are obviously going to be different than those who would choose not to, so don't get mad. I'm not trying to persuade…

Are you still a US citizen? If not, where? Is your startup registered in the US (i.e. a Delaware LLC)? If not, where?

What country/ies are appealing to you to switch citizenship and registration to, if any, for economical and legal reasons?

Re: Why are entrepreneurs leaving the U.S.?

#60

Post by mdda » Wed, Nov 30, 2011, 11:37 PM UTC

paulhauggis wrote: post #42

nirvana wrote: post #37

Earlier quoted context omitted.

That sure looks like a straight forward question, but it actually isn't. Business is an abstraction. We do the work we need to do wherever we are, but the business lives elsewhere, while our primary market is global, such that one of the countries with our largest sales (prior to recent pivot) is a country we've never visited.

okay, where do you pay your taxes? because this is all that really matters in terms of business.

I guess : The company pays tax wherever it is domiciled - and that's a matter of corporate tax rates, money transfer restrictions, and other red tape.

On a personal basis, it makes a huge difference whether one is a US citizen (where you have to pay the USA on the first $80k of your worldwide income, whether you are in the US or elsewhere) or not (most countries only tax you when you are tax resident).

For those not caught in the worldwide income trap, most countries only clock you in as a tax resident if you're there for more than 180 days in a year. If one can happily move on every 5 months (eg: Summer in France, 'Winter' in Chile, plus a couple of spare month's vacation) - then one can live tax-free legally...