by throwup238
5 subcomments
- This whole move is about corporate governance. The US makes it really easy to start or manage corporations and the courts are (mostly) streamlined and predictable, especially the chancery courts in Delaware. Cayman Islands adopted much of Delaware's legal approach to corporations in 2016 to make the island more business friendly rather than just a tax haven, and they've got a foot in the Latin American market. Singapore is the SEA equivalent of Delaware.
Nothing else much to it. In reality they're all going to have to register to do business in Canada/California/whatever and pay their taxes anyway. Structuring the parent in one of those jurisdictions just makes the legal wrangling about ownership and stock classes safer and more predictable to both investor and founder.
by wilson090
2 subcomments
- This is extremely misleading. YC still backs Canadian founders (and other international founders). There must have been one too many painful experiences investing in companies based in Canada. Creating or converting to a US-based entity is a standard ask for most international founders who want to participate YC and I suppose something has changed such that Canada is no longer an exception to that.
by garbawarb
4 subcomments
- > “It’s the Valley-or-bust mentality that breaks the ecosystem and really hurts Canada,” Gomez said.
Canadian pride isn't enough to keep a company in Canada. There are real and significant economic incentives to move elsewhere. That said, it's disappointing that YC no longer supports Canadian companies.
by michelmyara
0 subcomment
- This is a win from a tax perspective. Canadian founders pay Canadian income tax on their salary, regardless of where the company is incorporated. The Delaware C corporation pays its own income tax in the US using form 1120.
The personal tax rate is the same. The corporate tax rate is actually lower.
US: 21% (federal only).
Canada: 23% to 31%, depending on the province.
I'm the co-founder of looch, a US SMB financial platform. Our Delaware incorporation package is $249, all-in. https://looch.money/start
- I haven't talked to anyone at YC about this, have no inside information, and can't read the article*, but I imagine this is some technical change about where startups are incorporated. I'm sure applications from Canadian founders are as welcome as ever and there will be no change on the level of which applications get funded.
(* edit: I originally posted this in https://news.ycombinator.com/item?id=46772809 but have since merged the thread hither)
- That's truly saddening. I hope there will be more VC backing in Canada because the talent is definitely there.
- Is it politically motivated or does it have to do with Canadian tech not requiring investment because of its stability?
by ensemblehq
1 subcomments
- There could be many factors at play here so it’s not clear what the main issue is. However, from experience, US VC funds typically come from other US institutions and so it’s an easier sell when the corporation is US-based. Rules and regulations are more well understood and less complex for funds. The article states the requirement is to flip the structure to have the parent company based in one of the 3 countries mentioned. Presumably, better business/returns/policies
- Interesting - I was surprised to see a note on Wefunder, though the opposite direction that Canada residents aren't allowed to use the platform to invest. For context, no problem from Japan.
It sounds like Canada has some unique regulations here, wouldn't have expected that.
- [flagged]
by motohagiography
1 subcomments
- Whether it's significant or not, YC's basic model of seed funding with ~$100k could be reproduced in Canada with $10MM or less. Unsure how this is a problem.
If Canada wanted to be serious about startups it could make trivial changes to enable it. However it's committed to becoming a dutch diseased resource colony with no value add and a macquiladora for US software companies. Relative to capital and assets, it's the least productive place on earth. The whole thing runs on riding the coattails of like 5 undergrad profs at waterloo, and a certain bank everyone knows launders cartel money and facilitates capital flight out of China.
Judging by its impact, YC is one of the greatest companies of all time. Canada isn't in that game imo.
by throwpoaster
0 subcomment
- Probably de-risking (or front-running) capital controls (tariff on FDI).
- "y combinator website no longer lists canada as a country it invests in"
they say it like it's a bad thing
by ChrisArchitect
0 subcomment
- Earlier:
https://news.ycombinator.com/item?id=46772809
https://news.ycombinator.com/item?id=46771213
https://news.ycombinator.com/item?id=46723068
https://news.ycombinator.com/item?id=46773242
- Disappointing.
- Yeah, except Canada really sucks for innovation and startups. Canada's [[[insert any sector here]]] is basically controlled by 2-3 companies that will either kill your idea before it happens, or you must get their “blessing” to penetrate the market. The government doesn't help either. I remember seeing some programs that require 3 years of profit and at least 5 full-time employees to get support of, say, $100k Canadian dollars, which is even less than the US one. The only time you can do something in the Canadian market is when you are already a very well-established company with big capital; only then can you survive there. I have seen government contracts mostly always given to corporations rather than promising startups simply because the conditions required only apply to large corporations.
by brianbest101
0 subcomment
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by JimmaDaRustla
0 subcomment
- [flagged]
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by greenavocado
6 subcomments
- Canada's economy is dominated by a few big companies because the government makes too many rules. It costs too much to start a business here. In politics, only two parties really matter. This creates a closed system where big players stay big and new competition is crushed by red tape. Regulatory frameworks impose prohibitive compliance costs, favoring established incumbents over startups. Key sectors like banking, telecom, and aviation function as protected triopolies. Political power remains centralized between two parties with overlapping establishment interests. These structural barriers effectively suffocate competition and exclude new market entrants.
- Wonder if the founders not being US citizens or possibly even residents will hinder their ability to maintain their company. Or, whether this change increases the likelihood of being replaced when the startup shows some success.
Also, being foreign in the US is a concern at the moment. Hell, being native in the US is a concern at the moment...
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