The Venture Gap

Fellow Canadian technology entrepreneur Albert Lai is quoted as saying "you'd have to be an idiot to start a company in Canada" in the latest issue of of Canadian Business. The article, entitled Venture Gap, highlights the frustrations that both founders and funders face in Canada. Here's a summary:

• The money raised by Canadian VC firms, declined to $1.2 billion from $1.64 billion, a downward trend that began in ’01.
• American funds accounted for 41% of the invested capital last year, the highest level to date.
• The CRA requires an overwhelming amount of paperwork that discourages foreign investment. “Canada is the only country in the world that does this,” a Deloitte employee says.
• Tax incentives work for the benefit of pension funds, but against VCs in Ontario, thus lowering the capital pool available to startups. Government-led VC investment funds are so small, they are "laughable".
• The average Canadian VC investment size last year was $5 million. Canadian VCs are too conservative, selling out investments early to minimize losses, but also capping gains.

Lai isn't anti-Canadian. In fact, he's a huge supporter of Canadian entrepreneurs, and gives back by helping with the Toronto BarCamp movement, and speaking at events across the country. But sometimes, you have to call a spade  - a spade. Well said, Albert.

Comments

[Albert Lai]

Thanks for the kind comments. =)