Canada loses a lot of its top talent every year to the US, mostly because of the TN visa. Canadian talent leaves Canada every year, and less investment is not going to help.
This is made worse by Canadian investment culture being very conservative, and not loving startups in general.
We in the VC, PE, and Growth Equity space invest using other people's money.
The people who have capital in Canada are uninterested in funding Canadian domiciled GPs - they mostly end up choosing American asset classes because of high returns.
Institutional investors like the Ontario Teachers Pension Plan and CDQP tend to target asset classes outside of Canada due to their returns requirements being in the double digits range.
Edit: Can't reply
> TBF, the OTPP has a huge home bias - they’ve got more Canadian investments than they do US investments despite the market being less than a tenth the size
Huge by institutional investor standards but not in aggregate.
The majority of OTPP's assets are not in real estate [0] - out of $209B AUM, only $29.4B is invested in real estate globally.
Most of their Canadian assets are fixed income investments, and even then their overall Canadian assets are dwarfed by their transnational investments (primarily US and Asia).
> Institutional investors like the Ontario Teachers Pension Plan and CDQP tend to target asset classes outside of Canada due to their returns requirements being in the double digits range.
TBF, the OTPP has a huge home bias - they’ve got more Canadian investments than they do US investments despite the market being less than a tenth the size.
They couldn’t target a higher proportion of Canadian assets while remaining reasonably diversified.
Israel [0], China [1], and increasingly India [2][3] worked on resolving this issue by establishing funds of funds that partnered with private sector players by matching dollar-to-dollar with them to help build a VC ecosystem.
It's the same problem in the EU as well despite ECB proclamations. Heck, Norway's (ik not EU, it's EFTA) PIF has been conspicuously absent from any sort of statment of solidarity for Greenland unlike their Swedish, Finnish, and Danish peers because 25% of Norway's budget is dependent on the PIF maintaining double digit performance.
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> I think our biggest problem in Canada is total addressable market is small [...]
Israel is even smaller than Canada - 9 million people versus 40 million - and the median Israeli remains poorer [4] than the median Canada [5]. That didn't stop Israel.
Size of home country doesn't matter. The only difference is vision (and moreso lack thereof amongst Canadian and European decisionmakers).
> I don't think an Israeli founder would have trouble moving to the US if they wanted to.
They don't. In fact, Israel had an India-style brain drain to the US until the 2010s.
Heck, a little over a decade ago I had acquaintances of mine in TLV seriously considering moving their entire family to Sunnyvale for a $150k base salary job instead of earning $90k. They ended up deciding to become founders instead.
I think our biggest problem in Canada is total addressable market is small.. We're 40M people (compared to what, 350M in the US, and 900M in the EU), and we're directly next door to the largest startup economy in the world.
So not only do we have fewer customers, we're competing against an economic juggernaut that shares our broad business rules, our culture and language (with one exception) and can market to us through all our media channels with very little friction.
So unless you're in health care or some other regulated field that a US startup can't just expand into easily, it's a tough go.
Yeah but Israel doesn't have the proximity (in culture, media, advertising, entertainment, etc) that we do to the US.
All that US-centric stuff overshadows us constantly. And it's not just in the startup landscape.
We literally have laws on the books [0] that force our media companies to maintain a certain amount of Canadian content on TV/radio/streaming/etc so we're not only consuming US content.
This isn't a comment on whether that's good or bad, it's just a fact, and it has a real impact on our society at all levels.
There are a lot of "odd" things that happen to non-US citizens businesses that no one likes to talk about in public.
Indeed, if you are a Canadian Business getting market traction: the common scenario is acquisition by a US firm, or utter destruction by policy shifts and replacement by an opportunistic competitor. =3
Canada loses a lot of its top talent every year to the US, mostly because of the TN visa. Canadian talent leaves Canada every year, and less investment is not going to help.
This is made worse by Canadian investment culture being very conservative, and not loving startups in general.