3 ms·

It's interesting, I'm building a startup accelerator type thinger in Canada, very specifically for Canada (long story) - after about 6 months I noticed a really

by neom 2y ago

It's interesting, I'm building a startup accelerator type thinger in Canada, very specifically for Canada (long story) - after about 6 months I noticed a really interesting early stage phenomena where: Canadians are primarily being funded by Americans and Canadian Funds are primarily backing Americans. In closed doors, over lunches and dinners, over time, it finally came out, Canadian vc's don't believe Canadians are ambitious enough, they "don't even imagine moonshots". I wondered originally if it was a small thing, but as I've dug in over month and months, I've noticed it's both a very real thing and a very wide spread thing.

bookaway 2y ago
>I've noticed it's both a very real thing and a very wide spread thing. Sorry, just to be clear -- is the very real thing the fact that Canadian Funds believe Canadians aren't ambitious enough or is the real thing (in your opinion) that Canadians aren't ambitious enough.
- neom 2y ago
  Very wise thing to get clear on. Thank you. It's a self fulfilling prophecy, there aren't NOT ambitious founders in Canada, it's just "obnoxiously ambitious"* Canadians move to SF. *(whatever that means, but not said in a negative way, I'd put myself in that bucket, as a Canadian who moved to NYC and built DigitalOcean etc.)
  - bookaway 2y ago
    >It's a self fulfilling prophecy Funny, when I was trying to formulate a theory in my mind I was thinking of the phrase "vicious cycle". I was close enough, I think:) I'm wondering if it's because Canadians and other countries with similar environments have been conditioned to exercise a different muscle: getting and retaining public funding. The incentive there is to under-promise and deliver/over-deliver, or at least appear to be delivering or over-delivering on paper. It's like that because the public judges are often much less knowledgeable and are forced to judge you on what you said you were going to do on your initial proposal and you're often times forced to start working before any money is deposited in your bank account.
    - neom 2y ago
      In Roberts reply to my comment above, he mentioned I factor I thought was a 40-60% contributor, I'd say your observed factor is a contributor, and if I was asked to assign a value I'd say between 10-30%. I should probably write a blog post/phd on this.
  - CalRobert 2y ago
    The word for this in Ireland is "notions". Trying to be successful carries the stain of trying to be better than your peers. Perhaps Canadians have a similar word? I can't really think of an equivalent in the US, which is perhaps telling.
    - neom 2y ago
      Hey Robert. :) We don't have a word for it that I'm aware of, but I would say that is at least 40-60% of the undertone I notice. Even when I myself was getting into startup stuff 20+ years ago, I very very very vividly recall my father looking at me and saying with real distain "why do you think you have to be better than everyone else?".
      - jappgar 2y ago
        I've never really encountered this attitude outside of small towns though. At companies I see something similar I guess, but it's more defeatist than anything else. I hear this sentence a lot: "We can't compete with X so let's only do Y".
    - arrowsmith 2y ago
      This is a well-known thing in Scandinavia (or at least I think it's well-known - I'm not Scandinavian.) They call it the "Law of Jante". (https://en.wikipedia.org/wiki/Law_of_Jante https://en.wikipedia.org/wiki/Law_of_Jante) I didn't know it was a thing in Irish culture too.
    - jappgar 2y ago
      In Canada I don't think it's the same reasoning. We don't shame ambition, but we also prefer to be a "big fish in a little pond." It's the inferiority complex that comes from living so close to America. Companies and individuals that stay here are mostly focused on becoming the best Canadian version of the thing. The ones who want more just move to America.
olalonde 2y ago
It's funny because I've heard the reverse oftentimes: that Canadian VCs shied away from moonshot investments.
- playingalong 2y ago
  You only need a few VCs (and there are always outliers) and so many founders and their employees (by definition it's hard to have a crowd of outliers).
Sytten 2y ago
Canadian VC are way too cautious and they want outsized equity when in early stage. In general they are not reliable partners and will try to bail the moment the startup has a rough time. At best they are OK investors when you are already making money and you need some cash influx to continue growing. That is why we go for American VC, they understand the risk better, they have more money and (good ones) play the long game.
- neom 2y ago
  Maybe you can help me a bit. In what is almost a year of this research and building now, I've really only found Staircase Ventures and Inovia to be "American Style" in a genuine way (everyone talks, talk is cheap) - do you have anyone else you would add to this list? (Happy to take offline too, email is in bio) - Thank you! :)
- bookaway 2y ago
  Could the answer be that on average Canadian VCs are simply not rich enough compared to their American counterparts and the few that are succumb to the peer pressure of trying not to be the one schmuck who lost a lot of money? I've seen the same behavior from freshly minted American millionaires who want to take a swing at this "angel investor" thing due to FOMO.
corry 2y ago
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.
- corry 2y ago
  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.
  - neom 2y ago
    Would really love to jam out for an hr on this if you’re willing! je@h4x.club!
- 2y ago

by neom 2y ago

bookaway 2y ago

>I've noticed it's both a very real thing and a very wide spread thing. Sorry, just to be clear -- is the very real thing the fact that Canadian Funds believe Canadians aren't ambitious enough or is the real thing (in your opinion) that Canadians aren't ambitious enough.

neom 2y ago
Very wise thing to get clear on. Thank you. It's a self fulfilling prophecy, there aren't NOT ambitious founders in Canada, it's just "obnoxiously ambitious"* Canadians move to SF. *(whatever that means, but not said in a negative way, I'd put myself in that bucket, as a Canadian who moved to NYC and built DigitalOcean etc.)
- bookaway 2y ago
  >It's a self fulfilling prophecy Funny, when I was trying to formulate a theory in my mind I was thinking of the phrase "vicious cycle". I was close enough, I think:) I'm wondering if it's because Canadians and other countries with similar environments have been conditioned to exercise a different muscle: getting and retaining public funding. The incentive there is to under-promise and deliver/over-deliver, or at least appear to be delivering or over-delivering on paper. It's like that because the public judges are often much less knowledgeable and are forced to judge you on what you said you were going to do on your initial proposal and you're often times forced to start working before any money is deposited in your bank account.
  - neom 2y ago
    In Roberts reply to my comment above, he mentioned I factor I thought was a 40-60% contributor, I'd say your observed factor is a contributor, and if I was asked to assign a value I'd say between 10-30%. I should probably write a blog post/phd on this.
- CalRobert 2y ago
  The word for this in Ireland is "notions". Trying to be successful carries the stain of trying to be better than your peers. Perhaps Canadians have a similar word? I can't really think of an equivalent in the US, which is perhaps telling.
  - neom 2y ago
    Hey Robert. :) We don't have a word for it that I'm aware of, but I would say that is at least 40-60% of the undertone I notice. Even when I myself was getting into startup stuff 20+ years ago, I very very very vividly recall my father looking at me and saying with real distain "why do you think you have to be better than everyone else?".
    - jappgar 2y ago
      I've never really encountered this attitude outside of small towns though. At companies I see something similar I guess, but it's more defeatist than anything else. I hear this sentence a lot: "We can't compete with X so let's only do Y".
  - arrowsmith 2y ago
    This is a well-known thing in Scandinavia (or at least I think it's well-known - I'm not Scandinavian.) They call it the "Law of Jante". (https://en.wikipedia.org/wiki/Law_of_Jante https://en.wikipedia.org/wiki/Law_of_Jante) I didn't know it was a thing in Irish culture too.
  - jappgar 2y ago
    In Canada I don't think it's the same reasoning. We don't shame ambition, but we also prefer to be a "big fish in a little pond." It's the inferiority complex that comes from living so close to America. Companies and individuals that stay here are mostly focused on becoming the best Canadian version of the thing. The ones who want more just move to America.

olalonde 2y ago

It's funny because I've heard the reverse oftentimes: that Canadian VCs shied away from moonshot investments.

playingalong 2y ago
You only need a few VCs (and there are always outliers) and so many founders and their employees (by definition it's hard to have a crowd of outliers).

Sytten 2y ago

Canadian VC are way too cautious and they want outsized equity when in early stage. In general they are not reliable partners and will try to bail the moment the startup has a rough time. At best they are OK investors when you are already making money and you need some cash influx to continue growing. That is why we go for American VC, they understand the risk better, they have more money and (good ones) play the long game.

neom 2y ago
Maybe you can help me a bit. In what is almost a year of this research and building now, I've really only found Staircase Ventures and Inovia to be "American Style" in a genuine way (everyone talks, talk is cheap) - do you have anyone else you would add to this list? (Happy to take offline too, email is in bio) - Thank you! :)
bookaway 2y ago
Could the answer be that on average Canadian VCs are simply not rich enough compared to their American counterparts and the few that are succumb to the peer pressure of trying not to be the one schmuck who lost a lot of money? I've seen the same behavior from freshly minted American millionaires who want to take a swing at this "angel investor" thing due to FOMO.

corry 2y ago

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.

corry 2y ago
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.
- neom 2y ago
  Would really love to jam out for an hr on this if you’re willing! je@h4x.club!
2y ago