Canada’s small business atmosphere is a case study in shifting power-regions. Hubs like Waterloo and Toronto now lag behind the west. British Columbia has become the country’s strongest magnet for small enterprises, followed by Alberta and Saskatchewan.
As much as 3.9 per cent of B.C.’s population is employed by a startup company, defined as a company under two years of age, and that’s nearly double the share in Manitoba, the province with the lowest relative rate of startup activity.
East Side Games in Vancouver owes its reputation to a combination of talent, like-minded companies and investors that provide mentorship and investment.
Founded in June 2001, East Side Games creates mobile games and social media platforms. Today, it counts 50 employees and last year it reported $5 million in profits. Ask CEO Jason Bailey what made Vancouver so attractive to small business, and he will, somewhat stereotypically, tell you that it all stems from the city’s geographical location and Vancouverites’ philosophy of work-life balance.
But, he adds that the city has been working hard to become Canada’s “premier start-up hub,” through strategic student recruitment from schools like the University of British Columbia, and encouraging mentorship for entrepreneurs.
There are also many forward-looking, deep-pocketed investors, who, he says, like to think of themselves as “Silicon Valley North.” The province offers tax incentives for these investors, in the form of a 30 per cent investment rebate for investors and qualified companies.
According to Vancouver credit union Vancity, B.C.’s start-up scene was once heavily-invested in the gaming and social media realm, but has since grown. In recent years, those in the software-as-a-service sectors like Twitter client Hootsuite and law firm management software Clio have seen success. As well, Vancity investment manager Christine Bergeron has noted a “new interest” in the bio- and cleantech sectors.
B.C. venture capitalist Boris Wertz is the founder of Verison One Ventures, an early-stage fund that invests in Vancouver’s startup talent. Founded in July, Version One has already raised $15 million in capital to make investments—much of that money came from local Vancouver tech entrepreneurs who wanted to give back to their community. “Canada has a tremendous amount of engineering and design talent, but sometimes not the courage to build world-changing companies…I would love to see more entrepreneurs with huge ambition,” says Wertz.
This, he says, should be easy in the evolving business world. “The Internet is a powerful platform, taking control from gatekeepers and large corporations and letting small businesses and start-ups play a much larger role in creating value for almost every industry out there…this fundamental shift will create an incredible amount of innovation and opportunities for start-ups, and I hope Canada will be at the forefront of this development.”