[Kelbit]

I think it's more a case of VCs not being calibrated to the real cost of doing business. Canada is a first world country with a GDP per capita not much less than the states. There is plenty of wealth available that could be invested in tech. It's just Bay Street generally doesn't want to, because they don't understand the tech business.

Name one prominent Canadian VC firm - I can't think of any, and I'm Canadian. But ask me about US firms, and I can name firms like Sequioa, a16z, and BVP. We don't have that here.

[wk_end]

It's been suggested to me that because of Canada's long history of a resource-based economy, Canadian investors are far more accustomed to the long, slow model of: let's research a site for several years, make sure it'll be profitable, build a town, and get to work. The higher risk, fail-fast nature of VC investing is just too foreign to their business model.

[jboy55]

One of the problems is the public demands a lower risk investment. A single Theranos would knee cap the entire VC industry in Canada. "How could this be allowed to happen?!" The stories of LPs losing their $50k investments would lead the newspapers for months.

In Silicon Valley its a, 'Oh that sucks, but the smart money stayed away, that should have been a tell for the other investors".

[Kelbit]

That already happened, to a degree. Canada's dot-com darling was Nortel, which at peak accounted for 1/3 of the total valuation on the Toronto Stock Exchange.

Then the bubble burst and Nortel collapsed. A lot of institutional investors swore off tech after that, and it hasn't really rebounded.

[spoonie]

Nortel was an actual fraud though, as well as collapsing as a company. Changing financial reporting rules could prevent another Nortel-style fraud.

[Kelbit]

Agreed! But that wasn't the message that Bay Street took from it.

[moltar]

And all of the tech was siphoned away by Chinese spies!