This sponsored article is brought to you by Slava Apel, CEO, Startup Visa Services.
By now, the news that came out on April 29th (Canada.ca) has promulgated throughout the immigration industry that the Start-up Visa Program (SUVP) has significantly changed. My hope is that I can give some insight on what has potentially led to some of the decisions by IRCC to reform the SUVP.
IRCC said it was reducing the number of approvals that a designated organisation can give to just 10 per organisation due to the huge backlog of existing files.
An additional explanation, which was also echoed by information provided through NACO, was that the quality of the startup companies was not meeting the original spirit of the program. As someone who has worked with all three categories of designated organizations (Angels, Venture Capital groups and Incubators), I would attest that the quality standard and due diligence varied by each of the organisation.
As a designated organization representative under the SUVP, I have had the privilege of guiding innovative entrepreneurs from around the world through the process of establishing their businesses in Canada. My journey has been marked by rigorous due diligence, a keen eye for potential, and a commitment to fostering innovation. For some of the more promising ventures, I have spent between 4-6 zoom sessions over 6 months coaching them (for free on behalf of an Angel group) on how to present and change their pitch deck for them to have the highest success in raising the minimal capital ($75,000) and to qualify for the letter of support. And for others who thought that they were bringing innovation to Canada, I pointed out to them how simple it was for me to find a clone of their business already existing in Canada (which would disqualify them from claiming their innovation).
Qualifying Submissions: A Rigorous Process
The SUVP is designed to attract entrepreneurial talent that can create jobs and spur economic growth. However, not every application makes the cut. As a representative of a designated organization, my role involved meticulously evaluating each submission to ensure it meets the program’s stringent criteria. This included assessing the viability of the business idea, the entrepreneurial skills of the team, and their potential to contribute to the Canadian economy. Viability was an important factor, as I have seen claims that were absolutely astonishing.
During my tenure, I have developed a robust qualification framework that emphasizes the following:
- Innovation: The startup must offer a unique solution or product that addresses a significant market need. This innovation must be well-documented and backed by thorough research.
- Market Potential: It’s crucial to evaluate the market size and growth potential. A strong business plan that outlines a clear path to market entry and expansion is essential.
- Team Competency: The entrepreneurial team must demonstrate a blend of technical and business skills. Their track record and commitment to the project are scrutinized to ensure they have the capability to execute their business plan.
- Scalability: The business model should be scalable, with a clear strategy for growth and the ability to attract further investment.
- Funding: Self funded or funding from sales or funding from Angels or VCs should be planned out in financial projections.
In a recent webinar to immigration professionals, I highlighted that we have successfully processed numerous applications despite stringent selection criteria. For example, out of 300 applications, only one might receive a nomination an approval within the Angel group where I conducted the due dilligence. This rigorous selection ensures that only the most promising startups, with substantial potential for success, make it through.
Due Diligence: Ensuring Credibility and Potential
Due diligence is at the heart of my responsibilities. This involved a comprehensive review of the startup’s business plan, financial projections, and the background of the founders. Key aspects of my due diligence process include:
- Financial Health: Reviewing financial statements and projections to ensure the startup has a sound financial foundation and realistic growth expectations.
- Legal Compliance: Ensuring that the startup adheres to all legal and regulatory requirements in both their home country and Canada.
- Market Research: Conducting thorough market research to validate the startup’s claims about market needs and potential. Big emphasis is on Canadian market research.
- Risk Assessment: Identifying potential risks and challenges the startup might face and evaluating their plans to mitigate these risks.
Program Impact and Statistics
The Canadian Startup Visa program has seen significant growth since its inception. Originally a pilot program, it has now become a permanent fixture with less restrictive criteria. For instance, the requirement for education has been removed, making it more accessible. This evolution has led to a surge in applications, with the goal of processing 5,000 applicants per year by 2024, and increasing to 6,000 by 2026.
Since the program began in 2013, approximately 900 entrepreneurs (principal applicants) have become permanent residents through this category, representing the launch of more than 300 startups. (Canada.ca). The program aims to attract foreign entrepreneurs who can contribute to Canada’s innovation ecosystem and create jobs (Canada.ca).
To address the growing demand and backlog, recent changes include capping the number of permanent residence applications accepted for processing each year to those associated with no more than 10 startups per designated organization. Additionally, priority processing is provided for entrepreneurs whose startups are supported by Canadian capital or by a business incubator that is a member of Canada’s Tech Network (Canada.ca).
Personal Reflections
My experience in this role has been incredibly rewarding. I have witnessed firsthand the transformative power of innovative startups and the positive impact they can have on the Canadian economy. Each successful application represents a new chapter of growth, both for the entrepreneurs and for Canada.
How would the new changes impact the startup ecosystem and the designated organisations? My predictions are the following after speaking to 5 designated organisations in Ontario during the Collision conference in June 2024 and from my experiences:
- Some organisations will discontinue to program, as to keep knowledgeable support personnel for next two years just to approve 10 businesses per year, is not feasible.
- Some will (and already have) raise prices or require larger teams to be in each of the incubated or invested in business.
- Some already gave away the 10 letters of commitments, so they have closed the intake for the rest of the year.
In conclusion, the SUVP is a gateway for global talent to contribute to Canada’s innovation ecosystem. As a designated organization representative, my mission was to ensure that only the most promising startups are given this opportunity. Through rigorous qualification and due diligence processes, we can foster a thriving environment for entrepreneurial success in Canada. Canada needs entrepreneurs as every year we are losing companies that chose to leave to USA or purely close doors. It is a combination between the immigration professionals and designated organisations to ensure that we help and grow our entrepreneurial ecosystem.
About Slava Apel
Mr. Slava Apel is the CEO of Startup Visa Services in Canada and has been a part of the Canadian start-up ecosystem for over 20 years. As a “Startup Expert”, Mr. Apel works with immigration firms assisting their clients with business documentation and training required for an approval for business immigration to Canada.
Mr. Apel has received multiple industry awards – celebrating pre-landing and post-landing achievements that allow immigrating clients to thrive in Canada. Mr. Apel’s company has been helping businesses grow through commercialisation of new products, prototyping, proper business structuring and capitalisation.
With Mr. Apel’s involvement in multiple business incubators, accelerators, angel groups and venture capital firms – he is looking to partner with immigration firms for their client’s international business expansion, business relocation or starting of a new business. Slava speaks fluently 4 languages and has been a speaker and a business trainer in 16 countries.
About Startup Visa Services
Our founders have been a part of the Canadian start-up ecosystem for over 20 years. We have been working with accelerators, incubators, angel groups and VCs. Our offices are located in Toronto, Canada and we frequently set up meetings offsite to train immigration teams on all aspects of Startup Visa. Our founders have been known to teach at Toronto and Vaughan city hall, Angel groups and at international conferences.
Our team consists of senior industry professionals within the Startup and entrepreneurship space. Our team accolades include taking own companies public, being nominated by EY as an Entrepreneur of the Year, working in 5 business incubators, participating in Angel groups and many more. We have multiple PhD and Engineering and Analyst professionals in our company that work to help your client’s businesses succeed.
Our focus for the past 5 years has been in the Startup Visa stream. We work directly within and with the designated organizations to make sure your clients get accepted, processed and issued the Letter of Support. In 2019, we have helped over 100 individuals receive their Letter of Support for the purpose of Startup Visa in Canada. We have nearly a perfect record in placing your clients in an appropriate designated institution based on their profile and stages of their businesses.
We only work with CCIC accredited agents and law firms, and only as a back-office processing service. We do not market to end clients and do not accept “off the street” clients. Our services include business validation, business plan writing, IP protection, projections, marketing, training, websites, interview coaching, market research, post landing support (grants, reporting, marketing, biz dev) and peer review defence. Our main service is getting your clients the Letter of Support in the shortest possible time.
As a next step, we would like to meet at via online meeting or at your or our offices so we can discuss where we can collaborate in helping you with your client cases. We have a lot of experience working with large international law firms, and therefore we can be useful from day one. We work with individual cases, teams and even full cohorts of 15+ delegates every month.
