Canada: An Entrepreneur's Utopia?

With immigration reform in a constant state of flux, many highly-skilled highly skilled workers are being turned away at America's doorstep. Research shows that since 2005, the number of immigrant-founded tech companies in the U.S. has declined as much as 8.5 percent in some areas, including Silicon Valley. Canada, looking to take advantage of the dysfunction, passed the "startup visa" in order to attract spurned immigrant entrepreneurs, create new jobs and drive economic growth.

How does it work?

Canada's visa allows entrepreneurs and their families to enter the country and become citizens almost immediately. The hope is that this very bold and generous residency offer will entice more people to forgo the more arduous application processes of the U.S. and other countries.

What will begin as a five-year trial, the program will offer up to 2,750 visas per year. In addition to the immediate residency, entrepreneurs will not be deported in the event their business fails. The goal is to bring "brilliant young minds" to the country and, through trial and error, increase the number of successful businesses.

In order to qualify, applicants must secure funding from designated Canadian investors: $200,000 from a venture capitalist or $75,000 from an angel investor. Additionally, there are a few requirements that must be met to determine eligibility, including meeting education and language standards.

The Need

The visa program has been a long time coming for entrepreneurs in Canada. Danny Robinson, now CEO of Perch, knew there was a need when he and his startup, Bootup Labs, had difficulty trying to immigrate a founder to Canada from Romania. He contacted a handful of venture capitalists and accelerators and discovered this was a common issue.

"After being frustrated with current immigration options, I searched for alternatives and came across Brad Feld, The Foundry Group's Managing Director, promoting Startup Visa USA," says Robinson. "That was the answer."

Robinson knew a similar initiative was necessary and created Startup Visa Canada. In September 2010, he issued an open letter to the government asking for support of the program. Since the visa became official, Robinson says VC's have received hundreds of contacts from hopeful entrepreneurs.

"The culture is shifting" Robinson said. "Our venture community is actively looking for the best deals to be had anywhere in the world to bring to Canada. I'm expecting the first few deals to close in the fall."

Impact on America

Stateside there are few options in the works to complement Canada's program. Senator Mark Warner (D-VA) recently reintroduced the Startup Act to Congress, an act that quickly gaining bipartisan support. The bill, which has been on the floor three times now, would not only ease the pain of acquiring a visa for those interested in building a company in the U.S., it would grant green cards to students with a master's degree or a PhD in technology, science, mathematics or engineering.

The US currently offers the H-1B visa, which allows American companies to hire foreign workers to specialty positions in specific technical and theoretical fields, but it is far from immigrant-friendly. Not only does it not grant citizenship but individuals are not able to apply for the visa themselves; employers must apply on their behalf and pay approximately $5,000 in fees. This year, the U.S. received 124,000 applications for the 85,000 allotted visas. Due to the overwhelming requests, a lottery was held and nearly 40,000 potential workers were denied jobs.

What's next?

Congress, in an attempt to improve the proposed startup bill, is seeking input from members of the tech community. A crowdsourcing platform, Project Madison, has been created to encourage knowledgeable individuals to make recommendations on every aspect of the bill. This appears to be a reaction to Canada's recent marketing strategies.

Jason Kenney, Canada's Minister of Citizenship, Immigration, and Multiculturalism, is in the midst of an aggressive promotional campaign for the visa. Kenney is setting his sights on India and the UK after having already visited Silicon Valley on a four-day trip.

Congress must put forth a concerted effort in order to bring and keep, foreign entrepreneurs in America's tech communities. Other countries are aiming to capitalize on the United States' inadequate policies and, if no significant changes are made, tech hubs like Silicon Valley and New York City could suffer the consequences.