Should Canadian Startups Incorporate in the US to Get Funded?

we've got some questions coming in, but this first one is related to this one. Have a bit of responsibility on the. You okay, Graham? Sorry, you're just slightly delayed. I'll let you finish. No, all good. All good. No, jump into the questions. I'll jump in the night after. All right. So I've talked to several founders lately who recently had to move their corporations to the U.S. to get funding. Is this a strategy more startups should be pursuing? And specifically, we had a question here from Justin saying the Shopify's president was on Beta Kit podcast and spoke passionately that Canadian entrepreneurs can get it done in Canada, leaving for the Valley. He's interested in our thoughts about the Canada versus U.S. debate on funding. I would hop in here first and I'd say you certainly can get it done while staying in Canada. I think it really depends on how much capital you need for your business and potentially the industry you're in. Because, you know, if you are in a very capital intensive business and it is a very hot area. So, for example, you're doing something in med tech and you're going to need money. fifteen to thirty million dollars of capital raise before you're going to see any revenue. There's not that many groups of investors in Canada who are going to be dropping thirty million dollars into a MedTech situation. You'd probably be best to look for funding internationally, including in the US, and then potentially look for funding to follow on that in Canada. I think there are still lots of investors in Canada looking to invest in Canadian businesses, and you can certainly do it here. Canada is just a smaller pond. So if you feel like you're a really big fish and you can jump in the deep end in Silicon Valley, then feel free to jump in. But if you want to stay in the sort of Canada-sized pond, there are Canada-sized investors here for you. I would say, yeah, I would agree with that, Alex. And I think there is investment community here. I don't necessarily agree with the philosophy of trying to keep funding in Canada. I love the idea of building companies and building teams in Canada. I think it's a phenomenal place, but I actually think... Most companies benefit significantly from going to the U.S. to raise some of their capital or a majority of it, largely because you're going to be selling into the U.S. And the earlier you can get used to selling in that ecosystem, the earlier you can build network and community there and bring investors on board that are going to open doors, the better position you are to go to market. We have a ton of portfolio companies right now. moving sales operations and fundraising into kind of Austin, Texas, and like, Texas is the same size market as Canada. Right. And so from a go to market and scale the company, I think, massive benefit from building the team and keeping the company Canadian. But I don't fully support the idea of like, trying to localize all your funding here. I think if you can get across the border, and you can bring in a mix, I think you're better positioned in general. Yeah, and the other thing I found too with Canadian investors, and they're much more risk averse as opposed to the U.S. investors. If you are pre-revenue and you need to raise a pre-seed round, you're almost better off to go into the U.S. for that. You're absolutely better off. Yeah, setting up a U.S. LLC and going that route. No shade thrown to our investor friends on the call. It's the fact of the matter. There's tons of coverage on that too. And related to this, do startups and founders need paperwork to get grants or funding from the U.S.? Obviously, there's some requirements. For grants, yeah, you absolutely would need to be a U.S. company to get U.S. government grants, for sure. In order to have a U.S. investor invest in you, no, you can be a Canadian company and have U.S. investors invest, no problem, just like Canadians can invest in U.S. companies. Is it going to be easier for you to raise capital in the U.S. if you have a U.S. LLC that's set up? Sure, some investors in the US prefer only to invest into that. Certainly from an equity crowdfunding perspective, if you're trying to leverage those tools, the regulations are highly separate. So if you want to equity crowdfund in Canada, you have to use a company like mine that's a Canadian licensed equity crowdfunding platform. If you want to equity crowdfund in the US, you need a US incorporated business and you have to work with a US licensed platform. They're highly siloed from that perspective. And just to go off of what Alex was saying about you need to be a U.S. company to get U.S. grants. Any kind of government funding will only cover expenses within that country for the most part. Like you can't get a U.S. grant to pay for Canadian salaries, for example. There are like there is the the they can export in Canada will cover travel outside of Canada. But still, it's it's Canadian based as well at the end of the day. or it's country-based, sorry,