Serial entrepreneur Albert Lai did a lot of travelling before starting his sixth company a few years ago. It was research: the Canadian scouted locations in India, Malaysia, Singapore, Hong Kong, and China, before realizing that the best place to build his new mobile and social game studio was back home.
“The low cost of living plus the enormous government support we get in tax credits is better than anything else I’ve seen globally,” says Lai, the co-founder and CEO of Big Viking Games. “There’s no other place in the world I would consider starting a games company in 2011, and fortunately [that] still is the case.”
Lai sold his first Internet company in the late 1990s while still in his teens. Like most entrepreneurs, he’s struggled to access financing in the early days of his ventures. For a number of years, Lai was publicly critical of Canada’s dearth of startup funding, but today, he’s more likely to be found singing the country’s praises as a startup base. “It’s actually turning around,” says Lai. “I’m very happy with the progress we’ve made.”
Here are six reasons why Lai believes now is a great time to start a business in Canada.
1. An abundance of seed capital
Seed capital is in abundance today compared to 10 years ago, according to Lai. “For a seed-stage startup, Toronto is almost as good as anywhere else, except San Francisco,” he explains. “We have so much seed capital going around, relatively speaking. There’s never been a better time to start a seed stage company.”
The launch of OMERS Ventures in 2011 changed the game for VCs in Canada, says Lai. It stimulated the creation of new funds, and incentivized deep-pocketed U.S. investors to pour money into Canadian startups.
2. Access to a variety of government grants and tax credits
The feds also provide some relief for startups at tax time. “If you’re doing any sort of R&D, the government support that we get here through the SR&ED [Scientific Research and Experimental Development] tax credit is far better than anywhere else in the world,” points out Lai. “There’s nothing even close in the U.S.” Businesses can get upwards of 50% back in cash from the investments they make into R&D.
3. Access to great technical talent
The University of Waterloo and University of Toronto are two of the best engineering schools in North America says Lai, noting that top tech companies like Google and Facebook routinely recruit there.
“You’re always going to be competing with US companies that have a foreign exchange advantage and also a scale advantage,” acknowledges Lai. “But there’s always super-talented people that don’t want to live in the US, and that pool of people is quite significant.”
4. A low cost of living
“The only other spot where you’re going to find this level of technical talent is really the San Francisco-Bay Area, and the cost of living there is ridiculous,” observes Lai. “It’s way cheaper to live and build your company here than [in] San Francisco.”
5. A favourable exchange rate
The low loonie is a significant boon to companies who raise capital from U.S. investors. “You get your investment, then there’s another 40% bonus [from the exchange rate],” points out Lai. Companies selling their goods to U.S. clients receive a similar financial lift.
6. An abundance of entrepreneurial talent
“We’ve got a lot of entrepreneurial talent that’s developed over the last 10 years,” says Lai. “Maybe not as much [as] San Francisco, NYC, and a couple of other regions in the world like Israel, but much better than 90% of cities out there.”
MORE STARTUP RESOURCES:
- What Every Entrepreneur Should Know at Startup »
- 5 Lessons Every Entrepreneur Should Learn Early »
- Why Cities Need to Step Up Startup Support »
- The No-Money Startup Miracle »
- What Today’s Successful Startups Know »
Do you agree? What reasons would you add to Lia’s list? What hurdles to starting a business in Canada would you like to see removed? Share your thoughts and experiences by commenting below.