A new report on Montreal’s startup ecosystem written by Credo is arguing for more exposure of local companies, improved retention of international talent and eased language restrictions, more women employees and a flurry of other recommendations.

The Montreal Startup Ecosystem Report was authored by Christian Bélair and his team at Credo Productions, which owns and operates the La Gare coworking space; Sylvain Carle, FounderFuel’s general manager and a partner at Real Ventures; and Startupfest’s founder Phil Telio. It was financed by the city of Montreal, the Ministère de l’Économie, de la Science et de l’Innovation and the Chamber of Commerce of Metropolitan Montreal.

“This report served as a snapshop, a statement in time for today of the impact that startups have on our economy, the state of the startup industry and some of the issues they face,” said Telio. He hopes the group will publish the report on an annual basis, more functioning as a policy-influencer.

The 10 recommendations the report wrote for Montreal’s startup industry are:

1. Increase the exposure of Montreal students to the world of startups.

2. Facilitate the attraction, integration and retention of international talent within startups in Montreal:

Referencing the Canadian government’s Startup Visa Program, Credo wrote that “the Quebec government has developed a similar program, but it has not yet been implemented. Thus, we think it is desirable that the Government of Quebec continue its eforts in this regard and implement the program it has developed so that Montreal can host high potential international founders.”

The organization also mentioned that international senior talent often comes from environments where there is limited knowledge of the French language. “Their command of this language is therefore also limited. The fact that knowledge of French is a criterion in the permanent residency application process could then reduce the attractiveness of settling in Montreal. It may therefore be advisable to consider a different approach that would both attract senior talent and promote the French language…

“…the Chamber of Commerce of Metropolitan Montreal used the following wording: “It is more appropriate to target immigrants with knowledge and skills that are consistent with our labour market and to extend the offering of French classes to immigrants once they arrive in Quebec, than to set at the selection stage a minimum proportion of immigrants in the skilled workers category who declare knowledge of French at the time of their admission.”

3. Focus on creating and empowering university entrepreneurship centres.

4. Emphasize the importance of women in startups.

5. Clarify the sources and nature of available capital for startups in Montreal:

“The challenge is that this information is fragmented for the moment and even difcult to access sometimes. We therefore believe in the importance of centralizing information on available sources of capital so that it is available in a transparent manner…

“…the criteria for access to capital (venture and other) were mentioned by the majority of startups interviewed as a major source of frustration. The same applies for capital providers who are disappointed with the presentations of high-quality startups, but which do not ft with their selection models. Creating a summary guide to capital providers’ assessment criteria could therefore help align the rhetoric of startups with those assessing them.”

6. Strengthen collaboration between VCs and other capital providers.

7. Consolidate the place of Québec Inc. companies on the Montreal startup scene.

8. Strengthen the existing support infrastructure rather than increasing the number of initiatives:

It wrote that “a unanimous sentiment was expressed among key players interviewed: that new initiatives to support the startup ecosystem seem to be launched every day, despite the fact that many are very similar to existing approaches.”

9. Clarify and review the mentoring and coaching structure.

The report wrote that “the general comment from startups was that mentoring is relatively well organized and available… However, startups have expressed the need to be better supported with respect to coaching. It seems, when it comes to coaching, there are less formal, organized structures such as with mentoring.”

10. Designate entities responsible for government-startup relations, on both sides.

Credo wrote that an estimated 1,800 to 2,600 startups exist in Montreal with up to 6,000 founders and 8,000 employees, but only 400 were confirmed and identified. An estimated 125 meetup groups with 45,000 members are expected to exist. The report estimated 80 per cent of employees are men with an average age of 33, while women employees are typically 29 years old. The majority of founders had a bachelors degree or less.

The report also estimated that the speed of creation of startups grew by 205 per cent in 2015, while the estimated total funds invested in Montreal startups over the last five years was $360 million over 200 rounds.

As expected there exists “a marked concentration in three main areas of the city - Downtown, the Mile end, and the old Port.”

Moreover, about a fifth of startups had at least one patent while two-thirds of all ventures claim they offer a product or service that caters to the needs of the smart cities market. Interestingly, a little more than half said they have clients outside of Canada. The two most important foreign markets mentioned were the United States (72 per cent) and Western Europe (26 per cent).

The report argued that over 30 coworking spaces currently exist (MTLinTECH previously estimated 20-25), while the five most mentioned spaces (in order of importance) were: District 3, WeWork, Notman House, La Gare, and Nexus Montreal.

Financing (74 per cent) was listed as the largest external challenge for startups while financing (65 per cent) was listed as the most critical factor that affect the growth of Montreal’s startup ecosystem.

“More than three quarters of those capable of raising capital manage to do so in under a year, with close to 70 per cent able to close the transaction in less than six months. Only 20 per cent of startups seem to be able to raise capital in less than three months,” read the report.

And those firms who funded startups the most tend to reside in, unsurprisingly, Montreal.

Another interesting facet of the report was “in more than half of the startups surveyed, employees with prior startup experience account for less than 20 per cent of the launch team.” Based on this information, the authors of the report concluded that “it would therefore seem that we are beginning to see the involvement of a previous wave of Montreal entrepreneurs… in the current wave of new startups.”