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Montreal

Montreal is the cosmopolitan cultural hub of the Francophone community in Canada, and is just now beginning to grow its startup ecosystem. The provincial government is striving to make it easier to hire talent, using a combination of tax credits and favorable immigration laws that remove obstacles for talent to immigrate to Québec. This is also amplified by the presence of four excellent universities, most notably McGill and Université de Montréal, making the city a magnet for talented young people. Montreal’s location in North America, combined with its French heritage, makes it a great entry point for the European market. However, there is a feeling of being “under siege” culturally, and the government has been very active in promoting French over English. While Montreal may be a less developed ecosystem when compared to Toronto and Waterloo, the angel scene is more structured and less fragmented. Despite this, the angels in Montreal function closer to Series A investors, meaning that pre-revenue startups are not funded by angels, and instead rely on beneficial government programs.

In This Market

These businesses offer industry expertise and are a source of startup talent and potential customers. They help fuel the local startup community.

Opportunities

  • The cost of living is relatively affordable, making it accessible for startups to acquire talented individuals. When compared with other major cities in Canada and in North America, both commercial and residential rent is very cheap.
  • Canada’s Scientific Research and Experimental Development Tax Credit Program (SR&ED) gives tax rebates/credits to entities that conduct R&D or experimental development in Canada. Quebec offers the highest rebate, at 30%.
  • The angel community is more unified and less fragmented than other ecosystems in Canada.
  • The presence of top-tier research universities that cater to both linguistic and cultural segments of the population, such as McGill for Anglophones, and Université de Montréal for Francophones.
  • Montreal’s position in North America as a Francophone hub makes it a great entry point for the European market.
  • Promising verticals include tourism, gaming, health, and fashion.

Risk Factors

  • While Montreal is a bilingual city, the provincial government has a certain heavy handedness when it comes to the French language and regulations governing linguistic manners.
  • Due to the government incentives provided to early stage tech companies, angel groups will fund only post-revenue startups, and function closer to Series A investors than actual angels.
  • The valuations of companies is very low, combined with the lack of Series B and C funds leads many entrepreneurs to leave Montreal for the United States during fundraising.
  • Toronto and Waterloo have more experienced startup talent, and it is not yet in Montreal’s culture to build really large companies. Additionally, the ecosystem is still a few exits away from having something vibrant.
  • The ecosystem lacks a major corporate anchor, primarily due to the combination of the government leading the way and the corporations being more interested in “traditional” industries.
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