I think this is an overreaction. Why? Let's be honest. If you're the stereotypical 150-IQ, borderline-Aspie tech co-founder, you're going to have to find a business co-founder with connections. He's going to take a huge cut, and you're going to do more work. That's just how the system's set up. Then you deal with venture capitalists, who can pretty much set terms unilaterally because of their inappropriate and collusive influence over what everyone else thinks of you and your company.
If I'm an entrepreneur in need of capital, I'd rather pay a 10% tribute to someone who knows the paperwork than the current 90+ percent tribute (to people who can make introductions, people with sales skill, makers of reputations) of Silicon Valley.
With all due respect, you should read more about the SR&ED before you call someone's legitimate criticism an overreaction. It is a program designed to pay back a portion of salaries that go into scientific research or development. This isn't new capital, it is a rebate program where you earn back a portion of salaries that you have already paid.
The challenge in SR&ED is convincing the bureaucrats in charge of the program that the salaries you're asking for a rebate on actually went into advancing the state of technology. One problem is that many of the bureaucrats who work in this program come from accounting backgrounds. Hence the statement that you need to make sure your application contains the magic words that will get an application through.
In practice, the odds of an inventor receiving a full shred if she fills out her own application are nearly zero. So, to take part in a program like this, tech companies need to allocate ~7.5% of their annual research salaries to a shred specialist.
I'm Canadian and I pay taxes, so I have a few problems with this program. It is yet another program where you need an expert to sit in between the relevant business and the government. And, it's a perfect example of a Canadian government program where bureaucracy overwhelms the purpose.
But, as someone who works in tech and has gone through a few shred processes, this program seems crazy. Who is better qualified to explain an invention than the inventors themselves? And, if you need a gatekeeper to explain your innovation, are the bureaucrats involved competent enough to administer a program like this?
Those are important questions for Canadian taxpayers and are most certainly not an overreaction. Your feelings about the VC industry are obvious, but in this case, they aren't very relevant.
If I'm an entrepreneur in need of capital, I'd rather pay a 10% tribute to someone who knows the paperwork than the current 90+ percent tribute (to people who can make introductions, people with sales skill, makers of reputations) of Silicon Valley.