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
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.