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CAN'T FIND SOMETHING? |
Reversing B.C.’s tech brain drainArmed with success and experience, Silicon Valley expats are investing in and helping to develop Internet startups in CanadaBy Curt Cherewayko Danny Robinson, founder of Vancouver-based startup accelerator Bootup Labs, calls it the trap. It’s the Silicon Valley’s ability to lure citizens from other countries – including 300,000 Canadians over the years – with the promise of entrepreneurial success. Many Canadians who live in the valley have realized their aspirations, having founded or helped develop successful technology firms there over the years. “There is a Canadian in a high-level executive position in every major technology company in the Silicon Valley,” said the Mississauga-born Robinson, who founded and exited two Internet companies in the valley before retuning to Canada to found Bootup. Further evidence of the Canadian presence in the valley could be found at the Grow conference held this month in Vancouver, where Canadians who have become major executives, venture capitalists, serial entrepreneurs and deal-makers in the valley were well represented. But given their technical training and entrepreneurial zeal, expats in the Silicon Valley also contribute to Canada’s brain drain. It’s a problem that was more topical in Canada in previous years, but one that Robinson still witnesses. “There is no defensive strategy that will stop the brain drain,” said Robinson. “There is only an offensive strategy to reduce the churn of brains going out – by bringing more brains in.” In recent months, expat Canadians in the valley have joined in trying to cultivate an Internet technology sector in Canada that could be the foundation of such a trap. Leading that satellite offensive from the valley is the C100, an exclusive organization of Canadians formed last March. The group’s paying members are 70 Canadians who are trying to bridge the gap between the valley and Canada by investing in and developing Canadian Internet startups and connecting those companies with the right people in the valley – be they members of major technology companies like Google or leaders of venture capital funds. The Grow conference was largely the C100’s debut in Canada, but the organization has already made strides. According to C100 co-founder Anthony Lee, its members have already helped organize $40 million worth of cross-border financing in deals involving a half-dozen Canadian firms. Lee is a Vancouverite who moved to the U.S. in 1988 and landed in the Silicon Valley in 1994, where he’s now a partner in venture capital firm Altos Ventures. Altos recently invested in two Canadian technology startups, one in Calgary, the other in Toronto. “We really want to erase the border as much as possible and turn the whole notion of brain drain on its head and make it more of an issue of brain flow,” said Lee. “All these expats in the valley come back home all the time – to Vancouver, to Calgary, to Toronto – and we want to take advantage of that flow of people to create a flow of capital, a flow of business, a flow of contacts and a flow of networks.” Among the C100’s most prominent members are Rob Lloyd, executive vice-president of Cisco, and Sue Gardner, executive director of Wikipedia. Technology industry veterans like Robinson and venture capitalists Boris Wertz and Steve Hnatiuk are the C100’s eyes and ears on the ground in Vancouver. Through the C100, one of Wertz’s portfolio companies was recently connected to a high-ranking member of Apple Inc., which is notoriously difficult to get access to. While the physical border between Canada and the U.S. has become more prominent since 9-11, there’s also a less tangible divide. Section 116, a Canadian tax instrument that hampered many cross-border deal-makers, was removed in February, but the National Venture Capital Association still predicts venture capital in Canada will decline. Robinson has long been vocal about the dearth of available capital, particularly for Internet startups in Canada. Noted Lee: “Investors in the valley need to see Canadian companies and entrepreneurs in a different light. We want to create a brand around Canadian entrepreneurs.” Pascal Spothelfer, president of the British Columbia Technology Industry Association, is waiting to see how the C100 ultimately influences Canada’s technology clusters. “The C100 have had great experiences in the valley,” he said, “and the more we can benefit from those, the better.” Spothelfer is interested in whether the C100’s actions will reflect an altruistic intent or whether its members are being opportunistic and simply looking to Canada for new deals, given the valley’s competitiveness. Lee said the C100 will help create jobs in Canada. “And do we have to make sure that the companies that get funded keep their people in Canada?” said Lee. Not necessarily. He said C100 will start by helping to make Canadian entrepreneurs successful wherever they are in the world. “And that will always improve things in Canada,” he said. “People will always come back, always set up offices here, and they’ll fund other Canadians.” • cgc@biv.com This article from Business in Vancouver August 31-September 6, 2010; issue 1088 Business in Vancouver (www.biv.com) has been publishing in-depth local business news, analysis and commentary since 1989. The newspaper also produces a weekly ranked list of the biggest companies and players in a wide range of B.C. industries and commercial sectors, monthly features and industry-focused sections that arm its subscribers with a complete package of local business intelligence each week. |
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