4 ms·

That's truly saddening. I hope there will be more VC backing in Canada because the talent is definitely there.

by Rupok 8mo ago

alephnerd 8mo ago
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). [0] - https://www.otpp.com/content/dam/otpp/documents/reports/2024-ar/otpp-2024-annual-report-eng.pdf https://www.otpp.com/content/dam/otpp/documents/reports/2024...
- garbawarb 8mo ago
  Or Canadian real estate.
  - alephnerd 8mo ago
    Most institutional investors limit real estate to around less than 5% of their portfolio.
    - Joel_Mckay 8mo ago
      Not in Canada, the investment holding companies are leveraged 17:1 in some markets. Keep in mind the 2008 correction never happened in Canada. =3
  - deleted 8mo ago
    [deleted]
- EGreg 8mo ago
  So what's the upshot? No Canadian VCs? I guess there's always ClearCo LOL
  - alephnerd 8mo ago
    > No Canadian VCs Pretty much. 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. Edit: can't reply > 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. > 900M in the EU The EU only has a population of 450M people. [0] - https://www.yozmagroup.com/overview https://www.yozmagroup.com/overview [1] - https://english.www.gov.cn/news/202512/26/content_WS694e4e56c6d00ca5f9a08486.html https://english.www.gov.cn/news/202512/26/content_WS694e4e56... [2] - https://idtalliance.org/ https://idtalliance.org/ [3] - https://rdifund.anrf.gov.in/ https://rdifund.anrf.gov.in/ [4] - https://www.ynet.co.il/economy/article/bjn8ppfz2 https://www.ynet.co.il/economy/article/bjn8ppfz2 [5] - https://www03.cmhc-schl.gc.ca/hmip-pimh/en/TableMapChart/TableMatchingCriteria?GeographyType=Country&GeographyId=1&CategoryLevel1=Population%2C%20Households%20and%20Housing%20Stock&CategoryLevel2=Household%20Income&ColumnField=HouseholdIncomeRange&RowField=Province&SearchTags%5B0%5D.Key=Households&SearchTags%5B0%5D.Value=Number&SearchTags%5B1%5D.Key=Statistics&SearchTags%5B1%5D.Value=AverageAndMedian https://www03.cmhc-schl.gc.ca/hmip-pimh/en/TableMapChart/Tab...
- Marsymars 8mo ago
  > 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.
ivl 8mo ago
I have to disagree. 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.

That's truly saddening. I hope there will be more VC backing in Canada because the talent is definitely there.

by Rupok 8mo ago

That's truly saddening. I hope there will be more VC backing in Canada because the talent is definitely there.

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). [0] - https://www.otpp.com/content/dam/otpp/documents/reports/2024-ar/otpp-2024-annual-report-eng.pdf https://www.otpp.com/content/dam/otpp/documents/reports/2024...

garbawarb 8mo ago
Or Canadian real estate.
- alephnerd 8mo ago
  Most institutional investors limit real estate to around less than 5% of their portfolio.
  - Joel_Mckay 8mo ago
    Not in Canada, the investment holding companies are leveraged 17:1 in some markets. Keep in mind the 2008 correction never happened in Canada. =3
- deleted 8mo ago
  [deleted]
EGreg 8mo ago
So what's the upshot? No Canadian VCs? I guess there's always ClearCo LOL
- alephnerd 8mo ago
  > No Canadian VCs Pretty much. 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. Edit: can't reply > 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. > 900M in the EU The EU only has a population of 450M people. [0] - https://www.yozmagroup.com/overview https://www.yozmagroup.com/overview [1] - https://english.www.gov.cn/news/202512/26/content_WS694e4e56c6d00ca5f9a08486.html https://english.www.gov.cn/news/202512/26/content_WS694e4e56... [2] - https://idtalliance.org/ https://idtalliance.org/ [3] - https://rdifund.anrf.gov.in/ https://rdifund.anrf.gov.in/ [4] - https://www.ynet.co.il/economy/article/bjn8ppfz2 https://www.ynet.co.il/economy/article/bjn8ppfz2 [5] - https://www03.cmhc-schl.gc.ca/hmip-pimh/en/TableMapChart/TableMatchingCriteria?GeographyType=Country&GeographyId=1&CategoryLevel1=Population%2C%20Households%20and%20Housing%20Stock&CategoryLevel2=Household%20Income&ColumnField=HouseholdIncomeRange&RowField=Province&SearchTags%5B0%5D.Key=Households&SearchTags%5B0%5D.Value=Number&SearchTags%5B1%5D.Key=Statistics&SearchTags%5B1%5D.Value=AverageAndMedian https://www03.cmhc-schl.gc.ca/hmip-pimh/en/TableMapChart/Tab...
Marsymars 8mo ago
> 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.

ivl 8mo ago

I have to disagree. 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.