Extend your startup runway by moving to Montreal
By ·
David Bennahum raised $3.2M for his startup Ready. That was enough for 18 months of runway in its home city, New York, but David moved to Montreal with his whole family and turned those 18 months of runway into 40 months.
“We found Montreal to be the most undervalued startup ecosystem in North America” — David Bennahum
This incredible story comes from Jason Calacanis’ podcast This Week in Startups and is a fantastic watch or listen for any founder both in Montreal, or elsewhere, to cut costs and live a better quality of life.
Below you can find the episode from YouTube or Soundcloud, and some notes of the most notable factors for moving to our beautiful city.
Watch
Listen
Summary from David’s slides and quotes
While we highly recommend that you watch and listen to the episodes for yourself, if you cannot because you’re at work or any other reason, we’ve highlighted some notes below from his slides and presentation.
People Cost
- Baseline salaries 50% of what you have in hot American cities. Mid-range engineers at $90,000 CAD, or about $72,000 US vs. $175,000 in NY/SF
- Strong talent in Robotics, AI, and Gaming, among others
- Plus free health care, removing a huge benefit cost
R&D Credits
- Get back up to 78% of the engineer’s R&D time
“Holy shit that’s cheaper than outsourcing to India!” @ 12:46
- Industrial Research Assistance Program (IRAP) innovation funding for $25,000 to $1M or more. Not a loan or equity purchase, but direct grant
- Received pilot grant of $10,000 for 90 days of hiring a junior engineer
Personal Costs
- Significantly lower cost of living: real estate, education, health care — approximately 40–80% discount
- Net effect, personal cost for raising a family and being in a startup drops about 50% from SF/NY/LA to MTL
“The consequence is both de-risk and a lot of happiness and joy… So what do you do with all that joy? Well maybe you take a little vacation […]” @ 16:00
If that’s not enough, you can be certified as an expert in Quebec to come here and start a company where the government will waive all your provincial taxes for the first two years.
In Canada, the federal income tax rate is 25% and in Quebec you add another 28% on top resulting in around 53%. That might sound high but as David points out in the episode at the 16:35 minute mark, his friend in Oakland, California gets a 51% tax rate and receives no free education or health care.
That means David, who is classified as an expert in his field, is only paying 25% for his first two years here.
So why is Canada doing this?
“They just want to build a super successful 21st century economy” @ 17:42
This is very true — as one of many incubators that now exist in Montreal, we see the difference between the startup landscape in 2018 and back when we first started in 2013. There is far more awareness from local and federal governments who create more and more funds and grants, we have more people than ever coming through our doors to learn how to build incubators, and the quality of the startups applying continues to improve year on year.
David points out that it’s not just about economics and money. At around 17:40, he outlines a variety of political and social reasons why moving here was a good idea.
It sometimes takes an outsider to truly appreciate the beauty of what the locals have forgotten and now take for granted, and that is exactly what David has done in this podcast.
If your interest is piqued and you’re now considering Montreal as a potential city to launch and grow your startup, you can always visit our website or reach out to us at info@d3center.ca. To gather more information about moving to Montreal from Montreal International’s website here.