The ‘most wel­com­ing city’ ripe for startup re­lo­ca­tion

En­trepreneur­s turn to Canada, Toronto, as po­lit­i­cal un­cer­tainty sim­mers un­der Trump’s U.S.

Toronto Star - - GTA - NI­CHOLAS KEUNG IM­MI­GRA­TION RE­PORTER

Sha­roon Thomas moved his cloud soft­ware op­er­a­tion from In­dia to Sil­i­con Val­ley in Oc­to­ber 2015 after it was hand-picked by a high-pro­file ven­ture cap­i­tal fund.

He ar­rived to Cal­i­for­nia on a busi­ness visa that re­stricted him to de­vel­op­ing his busi­ness idea and didn’t al­low paid work. The visa also didn’t give him a chance to be­come a per­ma­nent res­i­dent in the U.S.

Last sum­mer, with the es­ca­lat­ing anti-im­mi­gra­tion and na­tion­al­ist rhetoric from then-pres­i­den­tial fron­trun­ner Don­ald Trump, Thomas ap­proached Toronto-based Ex­treme Ven­ture Part­ners, a tech­nol­ogy ven­ture cap­i­tal firm.

In early June, Thomas, 29, set­tled in Toronto and his com­pany Ful­fil is al­ready re­cruit­ing two sales ex­ec­u­tives to pro­mote its soft­ware, which helps dis­trib­u­tors and re­tail­ers man­age their in­ven­to­ries along with other e-com­merce prod­ucts. “Toronto is the world’s most wel­com­ing city. It is so di­verse that I feel right at home,” said the na­tive of Cochin, who has travelled and worked in Aus­tralia, Canada, Hong Kong, Spain, the United States and the United King­dom.

“Even be­fore Trump was elected, the U.S. (im­mi­gra­tion) did not have pro­vi­sions for startup en­trepreneur­s. After Trump, I felt I made a wise de­ci­sion to ap­ply to Canada. En­trepreneur­s al­ready have to deal with a lot of un­cer­tainty. The last thing we need is (to) have our im­mi­grant sta­tus ques­tioned.”

The re­lo­ca­tion is an ex­am­ple of a grow­ing in­ter­est among en­trepreneur­s in choos­ing Canada over the U.S., thanks to po­lit­i­cal un­cer­tainty south of the bor­der un­der U.S. Pres­i­dent Trump’s ad­min­is­tra­tion, which has made a travel ban against six Mus­lim­ma­jor­ity coun­tries, cur­rently be­ing chal­lenged in court, and a wall along the Mex­i­can bor­der pri­or­i­ties.

Thomas said a wealth of IT tal­ent and lower startup costs give Toronto an edge, and that sta­bil­ity is an im­por­tant con­sid­er­a­tion for en­trepreneur­s in se­lect­ing a lo­ca­tion.

Ac­cord­ing to Im­mi­gra­tion, Refugee and Ci­ti­zen­ship Canada, as of March 15, more than 100 for­eign en­trepreneur­s have been ap­proved for per­ma­nent res­i­dence in Canada un­der the Start-up Visa Pro­gram since its in­cep­tion in 2013. These en­trepreneur­s rep­re­sent more than 60 star­tups launched in Canada through this pro­gram, in which can­di­dates are heav­ily vet­ted for their busi­ness ideas and acu­men.

In to­tal, these pi­lot en­trepreneur­s re­ceived more than $3.7 mil­lion in in­vest­ment cap­i­tal from 32 ven­ture cap­i­tal funds, six an­gel in­vestor groups and 14 busi­ness in­cu­ba­tors des­ig­nated by Ottawa. Ap­pli­ca­tions are be­ing pro­cessed in a lit­tle more than five months on aver­age.

Some star­tups created un­der the pro­gram have al­ready been ac­quired by larger com­pa­nies, an in­di­ca­tor of suc­cess for a new ven­ture. Ta­len­tBuddy, an on­line school fo­cus­ing on teach­ing web devel­op­ment, was taken over by San Fran­cisco-based Udemy last year. Huzza, a Van­cou­ver-based video-stream­ing com­pany, was bought out by Kick­starter in Fe­bru­ary.

“The eval­u­a­tion of the pi­lot shows that it has largely met its goals,” said Im­mi­gra­tion De­part­ment spokesper­son Carl Beauchamp. “Suc­cess­ful startup visa ap­pli­cants from a di­verse range of coun­tries have launched their com­pa­nies across a num­ber of in­dus­tries. Some . . . are quickly be­com­ing es­tab­lished com­pa­nies.”

Ray Sharma, Ex­treme Ven­ture Part­ners’ CEO, said in­quiries from po­ten­tial star­tups have surged since Trump came to power and the grow­ing pool of in­ter­est al­lows his com­pany to cherry-pick the best of the best.

“We want to bring Amer­i­can com­pa­nies to Canada,” said Sharma, whose new Ex­treme Ac­cel­er­a­tors pro­gram hopes to fund up to 50 in­ter­na­tional star­tups along with pro­vid­ing men­tor­ship, ac­cess to re­sources and con­nec­tions for fol­lowon fund­ing.

“Canada’s pro­gres­sive­ness and mul­ti­cul­tur­al­ism makes its ci­ti­zen­ship the most val­ued in the world. That goes be­yond busi­ness.”

If suc­cess­ful, up to five mem­bers of the startup team se­lected un­der Ex­treme Ac­cel­er­a­tors, as well as their fam­i­lies, can be per­ma­nent res­i­dents, Sharma said.

Hamid Ak­bari, CEO of Blanc Labs, a Toronto-based soft­ware startup, said po­lit­i­cal cli­mate played a huge part in his de­ci­sion to come to Canada over the U.S.

“We had to choose be­tween the two coun­tries. I came when (Ge­orge W.) Bush was pres­i­dent. The ad­min­is­tra­tion had these poli­cies with Iran. It was a tough sit­u­a­tion,” said the Ira­nian na­tive, 40, who first came to Canada to pur­sue his doc­toral de­gree at York Univer­sity in 2005.

“The chal­lenge in the U.S. now is its un­pre­dictabil­ity. We don’t like un­cer­tainty. We like sta­bil­ity.”

Since Blanc Labs was es­tab­lished in 2013, it has ex­panded its op­er­a­tions to Colom­bia, Venezuela and the U.S. It now hires 20 em­ploy­ees and 150 soft­ware en­gi­neers and sci­en­tists on con­tract around the world.

AN­DREW FRAN­CIS WAL­LACE/TORONTO STAR

Sha­roon Thomas, right, with Ful­fil co-founder Ritu Panda, says Toronto “is so di­verse that I feel right at home.”

BLANC LABS

“The chal­lenge in the U.S. now is its un­pre­dictabil­ity,” says Hamid Ak­bari, CEO of Blanc Labs.

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