And if you have a critical mass of Bad Angels, the good ones will leave (they won’t be having any fun, so they’ll go find a different hobby.)
Well described. Most places in Canada have a critical mass of Bad Angels. I believe we need to reboot and rebuild the entire system, and in part I want to encourage and enables founders to invest in founders and bootstrap the next generation of Canadian angels.
Bay Area startups can go from initially announcing their pre-seed round to closing an oversubscribed round of SAFE notes in 72 hours. In Canada, you’re generally lucky if you can get a deal done in 3 months .
Or 6 months. It’s depressing.
In contrast, in the Canadian startup ecosystem where fewer deals happen, there is more time to evaluate any one startup or any one deal. The world of startups is fully knowable, and there’s plenty of time, so the time spent on a deal will expand to fill the time available. And if there’s a lot of time available, then deal diligence will quickly enter determinate territory. You will find time to ask, “what can go wrong.” And you’ll find a lot!
Yep. Also, increasingly, Canadian startups skip the Canadian Angel ecosystem entirely: they go straight to US-based accelerators and angels.
And…I mostly give startups this advice. Skip the waste of time that is the majority of the Canadian Angel system.
It’s a vicious cycle: the more that startups are selected for deterministic thinking, the more it ends up proving the VC’s skepticism right, and the less leverage the startups will have in negotiating terms next time around.
Ooof. I feel this. The feedback “be less Canadian” in part encompasses this. I find myself also saying that I don’t want to get infected with “Vancouver thinking”.
The minute you take SR&ED money, some meaningful part of your startup becomes a government work program. And the minute any of your startup becomes a government program, I can pretty reliably tell you what’ll happen to the rest of it. By seeding an ecosystem full of SR&ED funded startups, the Canadian government inadvertently drained the spontaneity and curiosity out of our startup scene. It’s hard to recover from that.
There is a lot here. It boils down to various government programs being a dangerous game to play.
There are a lot of SR&ED zombie companies. Companies that would not make a profit annually without that refund.
Unfortunately, this decision compounds generation after generation of startups. For every batch of 10 new founders, the 2 most creative ones immediately leave (because it’s the right decision), leaving behind the other 8.
See my previous point of opting out of the Canadian startup system entirely.
Of the major cities in Canada, Montreal is the only one that naturally has an infinite game mindset. (But it really, really does. Montreal is a special place.) If Montreal weren’t in Quebec, it would be an unstoppable startup scene.
I don’t know Montreal well enough to agree or disagree.
Vancouver and surroundings does not have the right mindset. What it does have is that it only takes 4 hours start to finish to be taking a meeting in the SF Bay Area.
So for some people, they can treat Vancouver as an SF suburb