It can be risky to move out of Canada's biggest city when you're a tech entrepreneur, but some startup founders who have taken that leap of faith and set up shop in smaller markets have found success.

"I was worried that I'll compromise a lot moving out of the city," Amy Davies, founder of employee onboarding firm First30, said in an interview.

"But in general, the feeling that there's more opportunity could be a bit of a facade in the city. You think there's more opportunity but that doesn't mean there is more opportunity."

Davies moved from Toronto to Brooklin, Ont., a small community about 50 minutes east of the city, in 2018 and launched First30 shortly after.

She says almost every aspect of life is easier in a smaller town, from running daily errands to accessing childcare. From a professional standpoint, she says it was tough to find fellow tech talent at first, but once she got involved with the right organizations, such as the local chamber of commerce and nearby tech hub Spark Centre, she found like-minded people.

"There are some great top talents and successful entrepreneurs who have opted to leave the chaos of the city," she said.

Housing, remote work push professionals to leave

As some tech founders opt for the rural life where housing is more affordable and the dramatic rise in remote work allows them to stay connected, innovation hubs that provide services to entrepreneurs have taken notice, opening satellite offices in smaller markets.

In 2020, Toronto Metropolitan University's (TMU) tech hub DMZ launched a satellite office in Innisfil, Ont., about 90 minutes north of the city. In 2018, York University opened affiliate tech hub YSpace in Markham, Ont. and Hume Hub, a mixed-use building with an engineering innovation unit, is currently being built in Collingwood, Ont., more than two hours north of Toronto.

CBRE listed Halifax, London, Ont. and Winnipeg in its top 25 lesser-known North American markets for tech talent in its 2022 Scoring Tech Talent report.

The data showed total tech talent employment growth rates over the past five years were 40 per cent in Halifax, 99 per cent in London, and 36 per cent in Winnipeg.

Meanwhile, in late 2020, the commercial real estate services firm said tech talent growth in smaller markets was outpacing major cities.

"Gone are the days when traditional startup hubs were exclusive to larger metropolitan areas," said Abdullah Snobar, executive director and chief executive of DMZ Ventures, TMU's investment arm.

"Technological innovation and starting and scaling a business in small towns have become increasingly attractive to founders."

He says part of what made Innisfil an attractive location for a DMZ satellite office was the fact that the town showed an eagerness to experiment with technology. Over the past few years, the town government implemented a ride-sharing transit system and began accepting bitcoin for property tax payments.

Small markets have advantages and downsides

Andrew Rains moved from Toronto to Innisfil in 2018 in search of affordable housing and daycare as his family expanded.

In Innisfil, he co-founded government software company FractionalSaas and subsequently Passed.AI, which offers AI technology to schools.

Similar to Davies, he found it difficult to seek out fellow entrepreneurs at first, but says DMZ Innisfil has been a helpful resource in providing office space and advice on marketing, contracts and funding.

He adds that sometimes it's difficult to participate in events held by entrepreneurial groups in Toronto.

While Rains says he might have been able to scale his companies faster if he had stayed in the big city and built his network there, with robust online marketing tools, target institutions "are still finding us," he says.

Living in a small town has also made it much easier to form relationships with local government officials.

"One of the things I would point out is when Innisfil is looking to solve problems, whether it's with operations or another department, we're in a place now, based on having built a close relationship, that they can give us a call and run concepts by us and whether or not we're the right people to build," he said.

Michelle Zadikian is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @m_zadikian.

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