Artour Benevolenski
Montreal’s Technology Entrepreneurship Ecosystem: Starting a Fintech Business
Introduction
Starting a business is a dream that seems difficult to achieve, however, in Quebec, and especially in Montreal, the doors can open faster than initially expected. In fact, the Quebec ecosystem needs entrepreneurs, not only for the creation of new jobs, but also to give a modern approach to today’s problems. The entrepreneur is his own boss and can solve complex societal problems, such as those in Finance, and gives a helping hand to those looking for an exciting livelihood. What was not possible before is possible today and Fintech (financial technologies), innovative start-ups that create an amalgam between finance and ICT (Information and Communication Technologies) prove it (e.g., Koho, which offers guaranteed cashbacks on prepaid credit cards, with a mostly online service (Koho, 2022)). But how will the reader react if the author tells him that starting a business in Montreal is a de facto necessity? It’s all there: the community, the resources, and the skilled workforce! “We are taxed, it’s expensive to live in Quebec […], the government sends you a very clear message, they don’t want you as a salaried employee, they want you as an entrepreneur, you have to create businesses, why (?) […], the tax rate of a company is much lower than in a salary”, according to Philippe Deveau, a specialist in credit files (Deveau, 2020).
Below is Table 1, which represents the corporate tax rate by country. Note that the tax rate is a generalized approximation. We notice that the percentage is low for Canada, which is only 15%! In total, a Quebecois company will pay higher for 11,5 % in provincial taxes in 2022 (Revenu Québec, 2022).
Higher the motivation: the Available Resources of Montreal
First, it is important to note that the Montreal entrepreneurial environment is collaborative, not competitive. Fans of Yuval Noah Harari will recall a key passage in Sapiens, which states that human evolution is based on the ability to collaborate. That’s what technology entrepreneurship is all about: a great multi-ethnic, multi-domain collaboration. A team made up of a founder and a multidisciplinary co-founder does better than a team where both are from the same field. By the way, if you want to start a business, you must do it in a team of at least two: there is too much work for one professional.
Secondly, Montreal is a world leader in start-ups with world-class expertise in many key areas for a start-up: the website can be done by local developers; the finances managed by local CPAs (it takes at least one); the marketing managed by HEC graduates, for example, the legal side, handled by local lawyers, who have an excellent education as a professional edge.
In terms of entrepreneurial skills, YouTube is becoming a very good resource with multiple tutorials on how and why. This is for the more advanced entrepreneur. The basics can be learned in an incubator, an organization that helps entrepreneurial projects get off the ground. The author has been there and the resources, the contacts, and the experience remain one of the best memories. They will give the theory and force to integrate it directly, guiding the entrepreneurs in the tasks necessary to do intelligent entrepreneurship with an applied scientific method (believe me, it is possible and Meta, as much as Tesla do it). For more advanced projects, an accelerator exists. This is an organization that will take the project from point A to point B in terms of sales. There is also close supervision, the possibility of having a mentor, and the offer of expertise in the sector of economic activity.
Life as an entrepreneur is a 24-hour workday, and you don’t even realize it: even a basic discussion can turn into recruitment after five minutes.
Montreal as a Pearl for Technological Entrepreneurship
First, as a picture is worth a thousand words, here are some statistics to encourage to see what Montreal is like for a start-up. It is possible to look, for example, at their numbers, some of which are completely self-sufficient financially. In 2019, Montreal had 1300 start-ups, more than a third of which are in the initial development phase. There are 23 organizations investing in said SMEs, 25 coworking spaces, places to meet interesting people (of course networking with a capital N), 42 incubators and gas pedals, more than 2800 founders operating in the network, and more than 1300 events per year (La Barbera, 2019).
Secondly, there are countless grants available to support the entrepreneur in his or her first steps. For example, LOJIQ grants are available to help founders keep moving forward, focusing entirely on their business. In addition, companies exist with slogans as bold as “The Next Big Tech will come from the university,” as said Gabriel Dannenbaum, director of operations at Front Row Ventures, a venture capital firm. The firm can mentor an innovative start-up and help it both financially and materially (providing a mentor or expertise). The sun is shining for entrepreneurs, even young ones.
Third, Montreal’s strength is, of course, its cultural diversity, so an entrepreneur who is not a typical entrepreneur is good for the said diversity. Typical implies someone from a Hollywood movie. A change of scenario feels good and there are only 114,000 businesses under female leadership out of a grand total of 730,000 businesses (La Presse, 2020), making a total of almost 16% women in entrepreneurship, in 2020. Ethnic and religious minorities are also underrepresented. In 2022, it’s the era of inclusion and the fight against cognitive biases, so how better to fight them than to undertake entrepreneurship?
Conclusion
In conclusion, Montreal is a superb city where it is possible to combine several sectors of activity thanks to the many quality resources that are available, both human and financial. Founding a fintech is a societal need, especially since one pays much fewer taxes by being an entrepreneur. Technological entrepreneurship is an important sphere that allows one to innovate and explore a new market by, sometimes, creating a new one. The entrepreneur is therefore the ultimate doctor of the patient (customer) alleviating his pain (need), like a doctor. Two key ideas are to be remembered: everything is impossible before it is done and that giants like Meta and Google only started with an idea.
References
Deveau, P. (2020). Leçon Impôt Québec – 2 minutes de connaissance [Online Video]. Youtube. https://www.youtube.com/watch?v=R7lCvuIhofU
La Barbera, S. (10 juillet 2019). “A portrait of Montreal’s startup ecosystem – by the numbers.” Montreal In Technology. http://www.montrealintechnology.com/a-portrait-of-montreals-startup-ecosystem-by-the-numbers/
The Canadian Press. (12th of August 2020). Les femmes entrepreneurs demeurent sous-représentées au Canada. La Presse. https://www.lapresse.ca/affaires/2020-08-12/les-femmes-entrepreneures-demeurent-sous-representees-au-canada.php
Nathalie de Marcellis-Warin, NMW. (2022, the 20th of October). Nathalie Marcellis-Warin’s educational website. https://warin.ca/ecoindusr/technologie-et-processus-de-production.html#de-lintrant-%C3%A0-lextrant-la-fonction-de-production-et-ses-d%C3%A9clinaisons