Canada is home to rich natural resources, a growing tech sector and a reliable agricultural industry. There are many opportunities for investors who wish to profit from Canadian businesses, and your investment could help you live and work in Canada for the foreseeable future. If you are ready to invest in Canada, you might be preparing to bring your family along for the adventure and start a new life in the True North. But how exactly do investor visas work? How do you obtain an investor visa as a venture capitalist in Canada? Can a Canadian immigration lawyer help you?
The Connection Between Venture Capitalists and Investor Visas in Canada
One of Canada’s most attractive options for entrepreneurs is its Start-Up Visa Program. Under this program, you can relocate to Canada and build your start-up while gaining permanent residency at the same time. However, you will need to make an investment in your new company before you gain your visa.
You have two options in this regard: You can either secure an investment from a “designated Canadian venture capital fund” or you can secure an investment from a “Canadian angel investor group.” The latter is easier, as you’ll only need an investment of $75,000. On the other hand, you’ll need an investment of $200,000 from a Canadian venture capital fund.
If you are familiar with the business world, you probably already know the difference between these two potential investment sources. Along with venture capital funds and angel investor groups, Canada also prioritizes applications backed by investments from “business incubators with committed capital” and certain organizations in “Canada’s Tech Network.”
Venture capital funds contain money pooled from multiple sources. This money is then used to invest in early-stage startups with high potential for success. Venture capital funds succeed by picking startups that eventually go on to become highly profitable. The effectiveness of a venture capital fund depends on its ability to “pick winners.” Recognized venture capital funds in Canada include names like Alt Ventures, Read Leaf Capital Corp, and WhiteHaven Venture.
Angel investor groups are similar because they also invest in early-stage startups, with the hope of picking successful companies. However, angel investors are individuals who invest their own hard-earned cash. In contrast, a venture capital fund invests other people’s money, often forming partnerships with pensions, foundations and family trusts.
So, what is the rationale for creating a lower investment requirement for angel investor groups? According to the Government of Canada, the minimum investment amounts represent the “typical” sums in each industry. In other words, angel investor groups tend to invest less in startups compared to venture capital funds. They also invest at an earlier stage in the startup’s development, when there is less “evidence” that the company will eventually become successful. In other words, angel investor groups take on more risk, so they invest less.
Some also argue that because angel investor groups are made of individuals, they are better-suited to act as mentors for entrepreneurs. The Canadian government might feel more comfortable with a lower investment amount from angel investor groups because of this. Instead of providing more money, angel investors might provide a different kind of “value” by helping entrepreneurs make important business decisions.
There are only six recognized angel investor groups that can provide investments for the Start-Up Visa Program. These include Canadian International Angel Investors, Ekagrata Inc., Golden Triangle Angel Network, Keiretsu Forum Canada, VANTEC Angel Network Inc., and York Angel Investors Inc. Although the investment threshold might be lower, you have fewer options compared to venture capital funds.
Can I Support an Entrepreneur Through the Start-Up Visa Program?
As of this writing, the Canadian government is no longer designating new organizations for the Start-Up Visa Program. The Canadian government also states that it only considers a total of 10 complete group applications per designated organization. This means that there is a limited supply of Start-Up Visas available in Canada each year. It also creates a sense of competition, as there is an incentive for angel investor groups and venture capital funds to carefully select only startups with the greatest chances of success.
While Canada is no longer designating new organizations, you can join an angel investor group or invest in a capital venture fund that already supports foreign entrepreneurs. Note that in order to join these groups, you need to meet certain criteria. Generally speaking, angel investor groups and venture capital funds only accept those with high net worth and financial/professional qualifications. There are also minimum investment amounts and minimum income requirements for angel investor groups and venture capital funds.
You Still Need to Meet Basic Immigration Requirements in Canada
Although the immigration process can be streamlined for entrepreneurs applying through the Start-Up Visa Program, everyone needs to meet the same basic requirements. One of the most challenging requirements for many foreign entrepreneurs is the mandatory mastery of English or French. That said, Canada’s bilingual status makes its language requirement easier compared to many other countries.
You also need to show that you have enough money to support yourself after moving to Canada. This could also prove challenging, especially since Canada has some of the highest living costs across all developed nations. To learn more about the basic requirements for immigrating to Canada, consider scheduling a consultation with an experienced immigration lawyer. Choose one who has guided entrepreneurs through the Start-Up Visa Program in the past.
Can a Canadian Immigration Lawyer Help With Investor Visas?
Investor visas represent common pathways toward Canadian residency. With the right strategy, your investment could provide you with a permanent home in Canada and a new life for your family. However, obtaining an investor visa involves much more than a simple transfer of funds. You will need to gain a clear understanding of Canadian immigration laws, basic requirements for all Canadian immigrants and various application forms. A Canadian immigration lawyer can guide you through this process from start to finish, so schedule an initial call with a Client Engagement Coordinator at Ackah Business Immigration Law to learn how to get started.
