As a Canadian founder who's been through YC, Series A, to a solid exit -- and who knows lots of other Canadian founders who both went through YC and didn't -- my view on this is that you're just seeing a kind of 'capital ghetto'.
The best Canadian companies and founders typical raise from US VCs, full stop. They "escape the ghetto". The US VCs give them better terms, more aggressive, more knowledgable, just overall a higher class of investors. Plus far more choice. At each round I've fundraised, the Canadian VCs were at least 20% lower on important terms like valuation and generally much harder to work with. Yes, there are great Canadian VCs too. But the speed, optimism and 'knowledge of the game' that good US VCs typically bring is much higher.
So what happens? If the best Canadian startups fundraise primarily from US investors, what are Canadian VCs left with? The more conservative, slower growing, less ambitious ones. So the VCs approach that with caution. Which furthers the cycle.
Canadians are more conservative in general, and that conservatism bleeds over into startups and VCs too (not to mention B2B / B2G markets). However, the real issue is that when a company appears to break that stereotype, they just raise from US VCs.
At least this is how it's been for the last 10+ years. Now in the 'new normal' after the frothy period, it's anyone's guess how things will play out. Perhaps the conservatism of Canadian VCs and startups will help them produce more viable long-term businesses in this environment vs. what worked best in the cheap-capital era.
Adding another interesting layer - my analysis doesn't hold true for angel investors, though. Maybe I was just really fortunate (or, 'of course I was!' in hindsight) but the Waterloo region angels who invested in us were so similar to YC themselves and angel investors from the valley. Founder-friendly, people who'd done it before, adventurous, etc. Almost the anti-pattern to Canadian VC.
So there's an interesting dynamic change between pre-seed and early seed angel climate and proper serious institutional VCs in Canada.
Do you mean that Canadians are fiscally / financially more conservative? I would probably agree with that (using risk tolerance as a proxy metric), but I thoroughly disagree if we're talking "conservative" in terms of politics / social beliefs.
The best Canadian companies and founders typical raise from US VCs, full stop. They "escape the ghetto". The US VCs give them better terms, more aggressive, more knowledgable, just overall a higher class of investors. Plus far more choice. At each round I've fundraised, the Canadian VCs were at least 20% lower on important terms like valuation and generally much harder to work with. Yes, there are great Canadian VCs too. But the speed, optimism and 'knowledge of the game' that good US VCs typically bring is much higher.
So what happens? If the best Canadian startups fundraise primarily from US investors, what are Canadian VCs left with? The more conservative, slower growing, less ambitious ones. So the VCs approach that with caution. Which furthers the cycle.
Canadians are more conservative in general, and that conservatism bleeds over into startups and VCs too (not to mention B2B / B2G markets). However, the real issue is that when a company appears to break that stereotype, they just raise from US VCs.
At least this is how it's been for the last 10+ years. Now in the 'new normal' after the frothy period, it's anyone's guess how things will play out. Perhaps the conservatism of Canadian VCs and startups will help them produce more viable long-term businesses in this environment vs. what worked best in the cheap-capital era.