Terminal makes it easy for companies to open international offices

Born out of a frustration with recruiting within the peninsula-trapped City of San Francisco, Terminal is a platform allowing companies to tap into talent abroad. Starting with campuses in Kitchener-Waterloo, Montreal and Vancouver, the startup aims to plant physical flags in as many of the world’s global talent centers as possible.

Terminal is being run by 8VC‘s Joe Lonsdale, Atomic‘s Jack Abraham and Dylan Serota, formerly of Eventbrite. The vision is a turnkey solution for international expansion that manages challenges ranging from identifying and recruiting talent to supplying office space, managing paperwork and distributing payroll.

By design, Terminal limits both the companies that can benefit from the platform and the engineers that can work at its offices. In limiting participation, Terminal maximizes its brand-value, increasing its odds of bringing in the best companies and the best engineers.

With the backdrop of an asphyxiating U.S. immigration policy, Terminal is looking to perform talent arbitrage. Engineers in Canada for example don’t demand the six plus figure salaries of their Bay Area counterparts. And towns like Waterloo and Montreal possess strong universities and healthy talent pools full of engineers that want the experience of a Silicon Valley startup without needing to pack up and move to the Bay Area.

Many companies have taken to opening offices in Canada to assist with securing top international talent. Uber and Facebook, among others, have recently opened up new offices in Canada targeting scarce AI and machine learning talent. Terminal is poaching these same recruiters from major tech companies to help startups.

Even with all the resources in the world, international expansion can put stress on the culture of small companies. It’s important to grow with intention and not create a team so distributed that it can’t be managed.

“In its very early days, a company should be in one spot, then go to two spots and scale that up for a while,” Lonsdale asserted. “I don’t think a startup should have three offices with a small number of employees in each.”

The Terminal co-founders are actively considering new cities to open offices. All of this gets to be capital intensive and while Abraham wouldn’t specify funding, he noted that the group has plenty of money at its disposal.

“We’re not planning on exiting,” Lonsdale added. “There is going to be a need for this in the long term future so we’re building this as a resource. Depending on what investors the company takes on, we can let them have liquidity as normal.”

Terminal’s 15 full-time employees have successfully recruited 100 engineers so far at three times the speed of a traditional recruiting firm. Terminal charges per-head for its recruiting efforts, collecting a percentage of employee salaries. Though this is an industry standard business model, Terminal collects a higher percentage because of its service approach that includes the physical offices and back-office support.

Some of the early customers of Terminal have come from the 8VC and Atomic portfolio. Other investors from Sequoia, Lightspeed and NEA have worked with Terminal to recruit for portfolio companies interested in gaining an international presence. Eventually these VCs could help to sift through the backlog of startups that want to take advantage of Terminal.