Canada's New Startup Visa Is Progressive By U.S. Standards, But For Them It Could Be A Step Backwards

from the not-all-businesses-need-funding-from-VCs... dept

For years now, I’ve talked about the importance of some sort of startup visa for immigrants starting companies in the US. Lots of people in the government agree with this idea, but they haven’t passed it because it’s about “immigration.” And no politician wants to take on immigration as a whole, because then it turns into nationalism about how those crazy foreigners are taking our jobs — even when that’s empirically not true. Canada, however, has now put in place a new startup visa that is somewhat similar to the various proposals floated down here in the US: entrepreneurs can get a visa if they have funding from a venture capitalist.

While I think that such a law would be a step forward in the US, in Canada it seems like it might actually be a step backwards. That’s because Canada already had very open borders to job-creating immigrants. Its old rules allowed an immigrant a visa if they opened a business that would hire one person for one year. But those visas are no longer being offered. And that seems like a problem. My big complaint over plans for a startup visa that require venture capitalist investment is that it assumes that entrepreneurs require venture capital. But that’s not true. Yes, for certain types of business, including capital-intensive, high-growth businesses, it often (though not always) makes sense to raise venture capital, but for many other successful types of businesses there are alternative sources of funding — including (these days) things like crowdfunding and (gasp) revenue funding.

Imagine a couple of entrepreneurs want to build some new gadget, so they put it up on Kickstarter and it raises $1 million. Does it then make sense to also require them to get a VC to “bless” them by giving them money… and taking a ton of equity and control? Or does it make sense to just say “hey, these guys are likely to have a legitimate business that will create jobs, let them in.” My other fear with linking a startup visa to VC funding is that it gives that much more control and power to VCs in negotiations. They now know that their money and investment isn’t just a ticket to funding the company, it’s a ticket into the country where they want to live. They can extract much more favorable terms under those conditions. While I’m not in the camp that thinks VCs are “bad,” there are some who clearly take advantage of entrepreneurs, and a startup visa linked to venture money only makes that more possible.

So, yes, we need a startup visa, and Canada should have one too. But it seems like Canada is going backwards with its efforts, taking away from a visa plan that works for all kinds of companies, and instead giving venture capitalists the ability to choose who gets into the country.

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Comments on “Canada's New Startup Visa Is Progressive By U.S. Standards, But For Them It Could Be A Step Backwards”

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TtfnJohn (profile) says:

Even if I was to agree, totally, that the old scheme could be gamed to only provide relatives and friends already in Canada with employment, with the help of a trusty and friendly immigration consultant saying that the proposed business requires VC blessing won’t stop that. It’ll just add cost up front to legitimate business class immigrants who were always going to set up shop here anyway.

Incidentally there’s nothing at all wrong with with employing friends and family particuarly if it keeps them off the dole and become tax paying, contributing members of society. It’s long been the nature of immigrant communities that they “stick to thier own” for hiring and employment for at least the first generation particularly when places like Canada are so culturally different from where they came from. The same applies to the United States.

If we can get the needs of Canada and the immigrant to line up, which they often do, then both get properly served.

More likely we’ll get unethical venture capitalists taking over from unethical immigration consultants who rob Canada and the migrant blind. And just as we get the immigration consultant scams under control we pull this one off.

testcore (profile) says:

Sounds like a lockup or handout

From the article, this is particularly telling – “The idea is to unite Canadian money and foreign brains”. Haven’t yet seen a statement that says the VC must be Canadian, but the quote implies it. Seems to me that if you’re a VC in Canada, you just got a massive handout in the cornering of the immigrant-founded startup market.

nospacesorspecialcharacters (profile) says:

Immigrants are people...

We’re all born on the same planet, with rather unfortunate imaginary lines drawn up by those with a less informed, limited worldview that came before us.

Does being born inside of one set of imaginary lines mean that person should be denied the rights of someone inside another set of imaginary lines?

Ill sentiment towards immigration is simply a loophole for closet racism. It’s not ok to treat Elbonians as inferior or deny them rights, but it is socially acceptible treat people from Elbonia as inferior or deny them rights.

Being born at a particular set of coordinates is impossible to change, unlike gender or (to a degree) skin colour. Why is it then treated with extreme prejudice?

Jesse (profile) says:


BTW did you know that under NAFTA, in the event of a national shortage of oil we must provide the US with oil before taking care of our own citizens?

This is contentious and the Canadian government does not believe these clauses would cause the above:

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