4 REASONS WHY VICTORY SQUARE VENTURES IN ANCHORED IN VANCOUVER.
Note: This post was originally posted on Medium by our CEO, Ray Walia, on September 28th, 2015.
As I write this I am currently in the air transiting back from Aruba where I spoke at the ATECH conference and now on my way to Turkey for the G20 Youth Entrepreneur Summit. In the next four months I will be in and out of Vancouver travelling to San Francisco, Toronto, Mexico, New York, Los Angeles, Las Vegas, and potentially a trip out to Colombia and Brazil. Through it all Vancouver is and will always be my central hub.
Locally back in Vancouver, sparks flew when Compass revealed that Vancouver dropped from #9 to #18 on the 2015 Global Startup Ecosystem Ranking report in July. Despite conducting over 200 interviews with entrepreneurs and local experts from 25 countries, and collecting 11,000 surveys from startups, investors and other stakeholders in the last five months, Vancouver techies couldn’t help but scratch their heads and wonder, “how the hell we ended up so close to the bottom of the food chain?”
Luckily, our very own Alex Chuang — Co-Founder and Chief Strategy Officer of Launch Academy dissected the report in his recent post on TechCrunch to answer that very question. While the report shows that Vancouver’s growth index (1.2) puts us behind up-and-coming startup ecosystems such as Bangalore (4.9), Sao Paulo (3.5) and Amsterdam (3.0), it’s important to note that the report failed to include the growth indexes of China, Taiwan, Japan, and Korea (twice, in 2012 and again this year for 2015).
While many of these findings may suggest startups have a greater chance of survival outside of Vancouver, here are some reasons why Victory Square Ventures decided to make Vancouver our home base:
1. VANCOUVER IS HOME
I think I can speak for all three of us (Manny, Shafin and myself) — we’ve all had opportunities to live and work in different parts of the world, but we’ve all come back to Vancouver in certain respects to build businesses here because for us, this is home. All three of us are in love with this city, our community, and our ecosystem here in Vancouver. Vancouver is such a diverse ecosystem in terms of ethnicity, geography, and demographics — it really makes a compelling place to build businesses that could have international appeal. With our focus being international, being in a place like Vancouver gives us the foundational outreach into different communities and geographical locations.
2. CLOSE PROXIMITY TO SEATTLE AND SAN FRANCISCO
While Silicon Valley ranked #1 and Seattle at #8 on the Global Startup Ecosystem Ranking, the benefit of operating in Vancouver is same time zone and its close proximity to these key ecosystems which helps drive channel partners to Vancouver. We saw this with the success of the Cascadia Startup Summit in 2014, and with Traction Conf in Vancouver this past June. Through these relationships we’ve developed with key influencers from SF and Seattle, we’re now bringing the Traction Conf to San Francisco in October based on popular demand.
3. ACCESS TO THE ASIA-PACIFIC GATEWAY
With the development of the Asia-Pacific Gateway and Corridor underway, being in Vancouver will allow us to leverage our potential expansion out into Asia. We’re also looking into expanding in Latin America and Europe, but all these communities have an affinity for Vancouver, so for us to sell them on coming here or working with partners in Vancouver isn’t that difficult. These overseas partners are also cognizant of the relationships and inroads we have into Seattle and Silicon Valley. For them coming into Canada as opposed to directly into the US is a bonus as Vancouver can act as a safe landing pad for them to utilize as an entry point into the North American market. Similar to how Singapore acts as a safe landing pad as an entry point into the Asian market.
4. AFFORDABILITY (AND LOYALTY) OF TECH TALENT & STARTUP-FRIENDLY TAX CREDITS
Based on our experiences on building businesses in Canada (specifically in British Columbia and Ontario), we’ve leveraged the benefits of the tax credits, access to government grants, and getting affordable (and loyal) tech talent. To compare, the average salary of devs in Silicon Valley is $118K for a software engineer versus the $51.6K in Vancouver.
With regards to government funding options and other non-dilutive financing programs, manage your time wisely. Ensure your company has reached product market fit and customer validation prior to exploring programs such as SR&ED and IRAP. Government grants and tax credit programs require quite a rigorous documentation and reporting process — which you must be on top of from day one of starting your company. Maximize your highly valuable time by focusing on what is most important at the early stages: talking to customers.
While Vancouver has many other benefits on starting a business, keep in mind that once you are ready to scale and grow that business, you will need to look for opportunities and channel partners outside of Vancouver (especially if your customer base is outside of Vancouver).