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Y Combinator website no longer lists Canada as a country it invests in

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Re: Y Combinator website no longer lists Canada as a country it invests in

#61

Post by Yeroc »

motohagiography wrote: post #53

Whether it's significant or not, YC's basic model of seed funding with ~$100k could be reproduced in Canada with $10MM or less. Unsure how this is a problem. If Canada wanted to be serious about startups it could make trivial changes to enable it. However it's committed to becoming a dutch diseased resource colony with no value add and a macquiladora for US software companies. Relative to capital and assets, it's the…

What are the trivial changes Canada could make if it wanted to be serious about startups?

Re: Y Combinator website no longer lists Canada as a country it invests in

#62

Post by curmudgeon22 »

trollbridge wrote: post #18
tptacek wrote: post #16

Earlier quoted context omitted.

Important added context here: the list went from US, Cayman, Singapore, Canada to US, Cayman, Singapore. It's not as if YC was generally investing in non-US based entities before. Canada was an exception and isn't anymore. We're a global employer, and just employing people in different jurisdictions is kind of a nightmare (totally worth it, though). I can't imagine how much of a pain it must be to try to manage inves…

It's a weird change though. Canada is one of the most investor-friendly and startup-friendly jurisdictions I can think of. If you want to grow quickly, you need to be thinking about how to get an office set up in places like Calgary (lots of machine-learning talent there), Toronto, and Vancouver, and when you do so you'll find the government incentives and lower wages lead to you spending about half on total compensa…

There are definitely still health insurance benefits (I'm Canadian). Yes, our doctor and hospital visits are covered, but many things are covered by employer paid insurance (or not at all):

- prescription medicine

- dental

- vision

- mental health

- things like physiotherapy

Re: Y Combinator website no longer lists Canada as a country it invests in

#63

Post by tptacek »

jleyank wrote: post #60
tptacek wrote: post #52

Earlier quoted context omitted.

Doesn't it seem likely that tax treatment has more to do with this than benefits? People are reading this like YC isn't investing in companies HQ'd in Canada, but there's no evidence of that! I look at a set {US, Singapore, Cayman} and what I think is "this is about taxes". Maybe especially tricky for YC since such a huge fraction of their portcos are pre-revenue.

The key question is whether they make non-US-ians move to the Valley to participate. Or, rephrasing, leave their home country to move to whichever piece of YC is cutting the check.

Again: there were 4 countries, total, in the standard YC deal terms. Now there are 3. There are many hundreds of YC companies headquartered overseas.

The standard move in this situation is that you form a US Delaware C Corp and make your HQ a subsidiary.

Re: Y Combinator website no longer lists Canada as a country it invests in

#64

Post by kijin »

greenavocado wrote: post #13

Canada's economy is dominated by a few big companies because the government makes too many rules. It costs too much to start a business here. In politics, only two parties really matter. This creates a closed system where big players stay big and new competition is crushed by red tape. Regulatory frameworks impose prohibitive compliance costs, favoring established incumbents over startups. Key sectors like banking, t…

The U.S. also has only two parties that really matter, with overlapping establishment interests. What makes the difference?

Re: Y Combinator website no longer lists Canada as a country it invests in

#65

Post by gucci-on-fleek »

tptacek wrote: post #47
1attice wrote: post #40

Earlier quoted context omitted.

Somewhat. Our provinces have fewer rights, powers and responsibilities than US states. The experience is more homogenous. It's only a nightmare if you hate all taxes and labour rights. So, you know, YC

You can still run a company from Canada under these terms, the same way every international YC batch company runs --- you can just go to the YC directory and select for EMEA, LATAM, APAC, &c. There's hundreds of them. Since this is purely about ownership structure and equity governing law, I'm curious what the intersection you're seeing between these terms and "labour rights" are. We're a US company with employees in…

> You can still run a company from Canada under these terms, the same way every international YC batch company runs

Having a Canada-registered company is usually required to get government grants and loans from Canadian banks, although that's probably not very important to VC-backed companies. There are also some tax advantages to running a Canada-registered company if you're based out of Canada, plus it's much easier to find a local professionals (lawyers, accountants, etc.) familiar with Canadian corporations than US corporations.

None of these issues should cause too many problems, but if given a choice, as a Canadian I'd certainly prefer to run a Canada-registered company over a US-registered one.

Re: Y Combinator website no longer lists Canada as a country it invests in

#66

Post by walterbell »

tptacek wrote: post #63
jleyank wrote: post #60

Earlier quoted context omitted.

The key question is whether they make non-US-ians move to the Valley to participate. Or, rephrasing, leave their home country to move to whichever piece of YC is cutting the check.

Again: there were 4 countries, total, in the standard YC deal terms. Now there are 3. There are many hundreds of YC companies headquartered overseas. The standard move in this situation is that you form a US Delaware C Corp and make your HQ a subsidiary.

Delaware vs. Cayman for LatAm startups: https://news.ycombinator.com/item?id=46686745

Re: Y Combinator website no longer lists Canada as a country it invests in

#67

Post by kdazzle »

garbawarb wrote: post #5

> “It’s the Valley-or-bust mentality that breaks the ecosystem and really hurts Canada,” Gomez said. Canadian pride isn't enough to keep a company in Canada. There are real and significant economic incentives to move elsewhere. That said, it's disappointing that YC no longer supports Canadian companies.

[flagged]

Re: Y Combinator website no longer lists Canada as a country it invests in

#68

Post by [deleted] »

ensemblehq wrote: post #55

There could be many factors at play here so it’s not clear what the main issue is. However, from experience, US VC funds typically come from other US institutions and so it’s an easier sell when the corporation is US-based. Rules and regulations are more well understood and less complex for funds. The article states the requirement is to flip the structure to have the parent company based in one of the 3 countries me…

[deleted]

Re: Y Combinator website no longer lists Canada as a country it invests in

#69

Post by tptacek »

gucci-on-fleek wrote: post #65
tptacek wrote: post #47

Earlier quoted context omitted.

You can still run a company from Canada under these terms, the same way every international YC batch company runs --- you can just go to the YC directory and select for EMEA, LATAM, APAC, &c. There's hundreds of them. Since this is purely about ownership structure and equity governing law, I'm curious what the intersection you're seeing between these terms and "labour rights" are. We're a US company with employees in…

> You can still run a company from Canada under these terms, the same way every international YC batch company runs Having a Canada-registered company is usually required to get government grants and loans from Canadian banks, although that's probably not very important to VC-backed companies. There are also some tax advantages to running a Canada-registered company if you're based out of Canada, plus it's much easie…

I'm sure a lot of British people want to run UK-registered companies! I'm not saying Canadians wouldn't rationally prefer to have the option of taking investments in a Canadian corporation, just that it doesn't look like there's a lot more to this than details for your finance person, and that it's the same deal every other country gets.

Read the thread: clearly a lot of people are reading this as "you can't HQ in Canada, your team has to move".

Re: Y Combinator website no longer lists Canada as a country it invests in

#70

Post by throwup238 »

This whole move is about corporate governance. The US makes it really easy to start or manage corporations and the courts are (mostly) streamlined and predictable, especially the chancery courts in Delaware. Cayman Islands adopted much of Delaware's legal approach to corporations in 2016 to make the island more business friendly rather than just a tax haven, and they've got a foot in the Latin American market. Singapore is the SEA equivalent of Delaware.

Nothing else much to it. In reality they're all going to have to register to do business in Canada/California/whatever and pay their taxes anyway. Structuring the parent in one of those jurisdictions just makes the legal wrangling about ownership and stock classes safer and more predictable to both investor and founder.

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