Kerry-Lugar Startup Visa Act may result in exodus of Canadian talent to U.S.

Saunders-45X64.JPGPosted by Alec Saunders
Venture Capital in Canada is in a dismal state of disarray. With activity at a 14 year low, investment companies have evaporated and funds are simply not being raised. Moreover, despite a resurgence of interest among angel investors, the institutional capital markets don’t show any sign of improving soon. One angel I spoke with last week opined that series A investments for his companies were most likely to come from Boston or the San Jose / Palo Alto / San Francisco than Toronto.
US Senators John Kerry and Richard Lugar [have] introduced The Startup Visa Act which, if passed, will almost certainly accelerate that trend.
Similar legislation has also been introduced in the US house of representatives by Colorado’s Jared Polis. Supported by more than 100 US vc’s and angel investors, the legislation would grant special visas to entrepreneurs with at least $100,000 from a sponsoring US investor in an equity financing of not less than $250,000. If after two years, the business has created 5 jobs and raised an additional $1,000,000, then the entrepreneur is entitled to permanent residency.
Many countries have immigrant investor legislation, including Canada. The legislation usually requires that an immigrant entrepreneur have a minimum net worth, and agrees to set up a business in the host country. The Kerry-Lugar legislation is the the first that I’m aware of that allows an investor in the host country to essentially sponsor the immigrant. That’s an important and useful innovation. Moreover, the funding requirements are tiny by US investment standards, allowing US investors to cherry-pick the best new businesses from around the world and bring them to the United States.
Will this new process result in a flight of Canadian entrepreneurs to Silicon Valley? It certainly seems likely, but only time will tell.

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