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3 Challenges With the Canadian Start-up Visa Letter of Support and How to Fix Them

Business Immigration | Start-up Visa Program | Federal Program

Marianella-Manzur

Marianella Manzur

Executive Director – Joorney Canada

Canada’s Start-up Visa program began as a five-year pilot program in 2013, and has since become the leading pathway for entrepreneurs and investors coming to Canada. The Start-Up Visa is designed to make the immigration process fast and easy for international entrepreneurs who are able to secure funding with investors.

The program connects innovative entrepreneurs with private sector investors to establish start-up businesses that are innovative, will create jobs for Canadians, and can compete on a global scale. In order to qualify for this visa program, you must have a start-up, an intermediate knowledge of English or French, and a Letter of Support from a designated organization.

Ok, so the first two requirements – having a startup and knowing either English or French – make sense, but what’s a designated organization, and why are they important?

Basically, designated organizations are Canadian private sector angel investors, venture capital funds, or business incubators that are approved to invest in or support start-ups through the Start-up Visa Program.

In order to qualify, a designated organization most often invests between $75,000 to $200,000 (depending on the type of organization) in a startup seeking a Canadian Start-up Visa, though it’s possible for candidates to also qualify with two or more investments totalling these amounts. However, investment is not necessary – designated organization that are incubator, which don’t invest money but rather provide education, resources, connections, and more, have no minimum investment requirement.

But either way, other than funding, you might be wondering why designated organizations are so important to your Start-Up Visa application. The short answer is- it’s the all important “letter of support.”

So let’s dive into what a letter of support is, why it’s important, three challenges that startups face and how to fix them.

What is a letter of support, and why are they important?

If a designated organization believes in your business, they’ll give you a Letter of Support that you’ll need for application for permanent residence under the Canada Start-up Visa Program. But what exactly is this all-important Letter of Support?

A Letter of Support is given to you by your investor as proof that they will support your business idea. It’s sort of like a letter of recommendation, but it includes a lot of detailed information about you, your Start-up Visa application, and your business.

The designated organization that writes your Letter of Support must include a description of your business and specific details about the legal and financial structure of the business. The Letter of Support should also include the names and role of everyone involved with the start-up. This is a seriously detailed letter, and we even have webinars about Letters of Support to help applicants get educated about it as they go through their Start-up Visa journey.

So, how do you get support from a designated organization?

Very simply, you’ll need to convince the designated organization that you have a business idea that is worth supporting. Your startup needs to have three things:

  1. it needs to be unique,
  2. It needs to be scalable, and
  3. It needs to be able to generate jobs.

Convincing a designated organization that a startup has all three of these things does involve pitching the startup idea, alongside a solid business plan.

But of course, just because something is simple, that doesn’t mean it’s easy or straightforward. Here are a few of the challenges we’ve come across with Start-up Visa letters of support, and some thoughts on how to overcome them.

Three challenges with the Start-up Visa’s Letter of Support process

We’ve come across three main challenges that applicants and the visa program in general encounter. Fortunately, we have three potential solutions.

Problem 1: Inconsistent application requirements

One major challenge is that designated organizations often have quite different requirements and expectations for how new start-up ideas are pitched to them. If you’re planning on pitching to several designated organizations, these differing requirements may force you to prepare and create different sets of documentation, such as business plans or pitch decks. And if you’re seeking more details on pitch requirements, you might find that designated organizations are sometimes not easy to reach, so it’s a challenge to get all the information you need about how they want to see business ideas.

Potential solution

Designated organizations should consider working together to create a standard set of expectations for start-up entrepreneur pitches. This would of course help the people pitching, but it would also make doing business easier for the designated organizations involved. Establishing the same set of expectations for applications would increase founder confidence, improve the quality of pitches, and potentially increase deal flow for designated organizations who are likely to hear from more and higher quality start-ups.

Problem 2: Little information on how to pitch

Designated organizations sometimes share very little information about the pitching process. Some organizations have information easily available on their websites, but it can be incomplete. Other organizations have no pitch-related information on their website at all. For many entrepreneurs, Canada’s Start-Up Visa is their first visa application of this kind, so as much detailed information as possible goes a long way. Applicants, especially early stage start-up founders, usually want to talk to someone in order to fully understand the process but they may be hindered by this lack of information.

Solution

The solution is simple: designated organizations should publish more detailed information on their websites. This information can include not just the required documentation and preferred application format (e.g. pitch deck vs business plan), but also the organization’s process and application timelines. Ideally, this information would also include contact information for individuals within the designated organization who can answer questions.

Problem 3: No post-visa follow-up

The Start-up Visa program is amazing because it fosters innovative business in Canada while bringing talented folks to the country. But some people have used the program to bring themselves and employees into Canada without really following through on their start-up idea.

A big reason for this may be because there isn’t a lot of follow-up once the Start-up Visa is granted. Which means that after the designated organization provides a letter of support and whatever release is required for the visa to be granted, they sometimes don’t keep the startups accountable.

Solution

Carrying out periodic check-ins between founders and their respective designated organizations can make sure that the start-ups and even the Start-up Visa program are moving toward growth and success. When E-2 investor visa holders in the US renew their visa they must prove some progress or forward momentum of the business. The Start-up Visa program may benefit from implementing a similar requirement.

Joorney can help navigate the Start-up Visa process

Canada aims to welcome 401,000 new permanent residents in 2021, and immigrant entrepreneurs will most likely play an important role in reaching this goal. Canada has prioritized easing its immigration process with programs like the Start-Up Visa, but that doesn’t mean that applying is a breeze.

Getting a Start-Up Visa in Canada requires support from a designated organization, so it is vital that you have a solid, concise, and enticing Start-Up Visa business plan. Joorney’s team has market-leading experience in immigration-based business plans that can help ensure your startup business idea gets the attention it deserves. Learn more about how we can support Start-up Visa Applicants or reach out to us directly!

Disclaimer: Joorney Business Plans Canada is not an immigration consultant, lawyer, or advisor and cannot be held responsible for damages incurred from the use of this information. If you require more information about a program or your specific immigration case, please contact a registered immigration professional.

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