Technology startups in Canada are seeking to lure back expatriates from Silicon Valley with the promise of executive roles, generous stakes and the chance to stamp their mark on a nascent industry.
Michael Katchen is one of the first. He came home to Toronto after helping to build and then sell a company in California. Four of the 40-odd employees of his latest venture, Wealthsimple, were once expatriates too.
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"There is a benefit in being part of the engineering culture in the Valley ... a different sort of skill set that you acquire from being in senior positions or being around such a dense population of startups," Katchen says.
Katchen was one many Canadian techies to have left home in the past decade, frustrated by a lack of opportunity. Industry executives estimate between 300,000 and 350,000 Canadians live in Silicon Valley.
A small but growing number are being tempted to return to plum jobs in Canada's tech hub of Waterloo and Kitchener, Ontario, where many former employees of BlackBerry Ltd have struck out on their own.
The paychecks, for sure, are smaller. A product manager in Toronto might draw an annual salary of $82,000 versus an average $126,966 for a similar job in San Jose, California, according to job listings website Glassdoor.
The tradeoff is a shorter commute, a cheaper house and a laid-back lifestyle likely to appeal to 30- and 40-something executives looking to put down roots.
"In San Francisco, a one-bedroom apartment will cost you $3,000 a month. Here, $3,000 will get you a significant place," said Jeff Fedor, 45, who returned to Waterloo at the invitation of a former Silicon Valley colleague last year.
"I know a lot of people in the Bay area who had great mountain bikes and kayaks that had never been in dirt and never been in water," said Fedor, chief technology officer at travel marketplace Demeure. "There's just no time to do it there."
To date, only a handful of Canadian startups have acquired the scale and capital to tempt back senior executives. The hope is that others will follow the likes of Hootsuite, Wattpad and Shopify, each of which is now valued at $1 billion or more.
Salim Teja, executive vice-president at Toronto's MaRS Discovery District, a non-profit organization that connects startups and investors, said the impact will be greater in two to three years.
Government initiatives will help. A tax incentive program, for example, lets startups reclaim a portion of the software-development salaries they pay. Companies can also claim up to $200,000 in grants for research and development.
These benefits help startups flourish, says Andrew D'Souza, president of Bionym, which makes a wristwatch that uses heart rhythms to authenticate the user's identity.
"With R&D tax credits in Canada, the cost of an engineer to an employer usually ends up being less than half of what they'd end up paying in Silicon Valley," he said.
(By Sayantani Ghosh; Additional reporting by Euan Rocha; Editing by Robin Paxton and Peter Galloway)