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by keithwhor 2825 days ago
That could be a start, but this is the wrong mentality.

Investors shouldn't back Canadian startups because they're cheap. That's almost a distinctly Canadian view of investment -- get things cheap, undervalued, or with a low risk profile. (Sorry, Canada, somebody in Canadian VC is going to roll their eyes at me here but it's pretty accurate.)

They should back Canadian or Canadian-led startups because talent is undervalued, and with the right mentorship and a good talent aggregator (an ambitious company that can compete on the world stage), the ROI on product development is going to be through the roof. Don't think about it as getting talent on the cheap, think about it as: if you pay the talent what they're worth, they're going to do 10x the job for you.

Note: there's been a huge uptick in Canadian tech $ recently. Both Microsoft and Uber investing $750M combined in Toronto, announced just this month. People are noticing.

... but that's just my $0.02 :).

Edit: First thing you learn when you talk to sophisticated investors / founders in SV is nobody gives a shit about cheap. Bad investors chase "cheap." What's most important is total magnitude of the opportunity space: who cares what we pay today, how big could this be? Because if the answer is "there's a $3T opportunity here over the next decade" then it doesn't matter if you invest $1M or $10M from a $1B fund -- in fact you'd probably rather invest more to ensure the company you're funding stays capitalized.

You're not going to get top SV VCs dumping $ into Canada because they can make a few bucks on cheap deals. You'll get top SV VCs dumping $ into Canada when the collective Canadian psychology changes from, "we're cheap, invest in Canada" to "we're going to be the most technically sophisticated nation on the planet, and a primary home of the next five major $100B technology companies over the next 30 years."

Canada will get there. Already leading in AI. But not by being "cheap."

2 comments

I meant cheaper while still offering the same degree of talent. Not just cheaper. But I think you raise very good points about framing the discussion in terms of talent rather than cost.
SV investors are not the be all end all. The historical track record of the VC industry is quite bleak.