{"id":88762,"date":"2025-09-27T11:48:09","date_gmt":"2025-09-27T11:48:09","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/88762\/"},"modified":"2025-09-27T11:48:09","modified_gmt":"2025-09-27T11:48:09","slug":"tech-founders-leaving-canada-at-accelerating-rate-survey-finds","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/88762\/","title":{"rendered":"Tech founders leaving Canada at accelerating rate, survey finds"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Gideon Hayden, co-founder and managing partner at Leaders Fund, which found that just 32.4 per cent of Canadian-led ‘high-potential’ startups launched in 2024 were headquartered in Canada.EDUARDO LIMA\/The Globe and Mail<\/p>\n

Gumloop began as a classic tech startup<\/a>: two friends furiously coding in their bedrooms. It\u2019s the kind of promising company Canada has banked on to help improve its lagging economic growth. Gumloop uses artificial intelligence<\/a> to automate workflows, counts Instacart CART-Q<\/a> and Shopify SHOP-T<\/a> as customers and raised US$17-million in venture capital this year.<\/p>\n

But after completing San Francisco\u2019s famed Y Combinator accelerator program in 2024, \u201cyou drink the Kool-Aid,\u201d co-founder Max Brodeur-Urbas said. \u201cThey convince you by the end to stay.\u201d Gumloop did that, relocating to San Francisco from Vancouver last year. \u201cIt\u2019s our job to do everything we possibly can to optimize for success,\u201d Mr. Brodeur-Urbas said. \u201cBeing in S.F. is a big one.\u201d<\/p>\n

The Bay Area has long had a magnetic pull for entrepreneurs, and Canadians co-founded tech giants there such as Uber UBER-N<\/a>, OpenAI and Slack WORK-N<\/a>. A new study<\/a> suggests the brain drain has accelerated.<\/p>\n

Toronto venture-capital firm Leaders Fund found that just 32.4 per cent of Canadian-led \u201chigh-potential\u201d startups launched in 2024 were headquartered in Canada. (The study defined these startups as having raised US$1-million, with most of their senior leaders educated in Canada. The survey tracked 2,932 such companies over a decade.) From 2015 to 2019, that figure exceeded 67 per cent. Much of the decline has occurred since the COVID-19 pandemic began. As a result, Canada is producing relatively fewer of the world\u2019s high-potential startups, the study finds. <\/p>\n

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Most of the movement has been to the United States, home to nearly half of the new Canadian-led high-potential startups founded <\/b>in 2024. That\u2019s almost double the level from the class of 2019. \u201cWe\u2019re seeing in tech what we\u2019ve witnessed in oil, gas and mining \u2013 a steady departure of top talent and headquarters,\u201d said mining magnate Seymour Schulich, a key backer of Leaders Fund.<\/p>\n

Whether the trend will continue is unclear. For one thing, the Trump administration said Friday it is imposing a US$100,000 fee on companies, typically tech giants, for each new worker they bring in from abroad on H-1B visas. This could represent an opportunity for Canadian companies to aggressively recruit skilled workers from outside the country. \u201cWe\u2019re inviting tech talent, innovators, and scientists to come to B.C.,\u201d Ravi Kahlon, the province\u2019s Minister for Jobs and Economic Growth, wrote on X<\/a> in response to the U.S. policy change.<\/p>\n

But the new fee could also prompt U.S. firms to recruit more in Canada, which is covered by a different visa.<\/p>\n

The Leaders Fund study and other industry players have identified many issues that are hurting Canada\u2019s competitiveness. Managing partner Gideon Hayden said deal flow at the Leaders Fund used to come mostly from Canada, but investments in the U.S. and Israel now account for 70 per cent of its financings. That shift prompted the firm to seek out whether that indicated a wider trend, using data from market-research firm Specter. \u201cWhat is indisputable is that after 2020, virtually every single one of these metrics,\u201d he said, \u201cstart to deteriorate in Canada, while in other ecosystems, that is not necessarily the case.\u201d<\/p>\n

Canada\u2019s tech ecosystem still has many strengths. There are 70-plus private tech companies<\/a> here generating US$100-million or more in revenue. Shopify Inc. is stronger than ever. Many entrepreneurs have no interest in relocating, including Anwaar Malik, co-founder of AllMind AI in Waterloo, Ont., who says quality talent costs less in Canada and the local business community is more helpful than in the U.S.<\/p>\n

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And yet promising Canadian entrepreneurs are leaving in droves. \u201cI\u2019m dealing with a lot of young founders that are just picking up and moving because it makes more sense for them,\u201d said Chad Bayne, co-chair of law firm Osler, Hoskin & Harcourt LLP\u2019s technology practice. \u201cIf too many of our best and brightest move to the U.S. early on, it will be harder to bring them back, and you\u2019ll have a lost generation.\u201d <\/p>\n

That\u2019s the kind of thing that gross domestic product, which tracks economic output, cannot measure. Nor does it account for the lost potential of companies that moved or were never started here. \u201cThis should be a priority of the government,\u201d Mr. Bayne said. \u201cI don\u2019t think we\u2019re in a crisis yet. But if we leave it too long, it will become one.\u201d<\/p>\n

The study shows the U.S. produced 45 times as many high-potential startups as Canada in 2024, more than three times the rate from 2015 to 2020. Canada\u2019s share of high-potential startups created among a pool of four regions \u2013 here, the U.S., the European Union and Israel \u2013 collapsed by more than two-thirds, from 4.8 per cent in 2018 to 1.5 per cent last year. The EU and Israel also experienced declines, but not nearly as steep, while the U.S. increased its share. The data also show U.S.-based, Canadian-led startups consistently outraised those anchored here.<\/p>\n

The global tech sector entered a slump in late 2021. Many believe the lengthy pandemic lockdowns in Canada compared with the U.S. held back a recovery, as the tech hubs of San Francisco and New York were quicker to restart networking events such as hackathons and founder meet-ups. \u201cOne reason why you stayed here was a really strong in-person community,\u201d said Boris Wertz, managing partner of Vancouver-based Version One Ventures. \u201cWhen that went away, there were less reasons to stay.\u201d <\/p>\n

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Numerous Canadian tech leaders maintain the sector is rebounding and thriving. Several Canadian venture capitalists said they have a deep, robust pipeline of prospective deals. \u201cWe are seeing a lot of high-potential early-stage technology companies in Canada, significantly more than two or three years ago,\u201d said Janet Bannister, managing partner of Toronto-based seed investor Staircase Ventures.<\/p>\n

Mr. Hayden acknowledged that could be the case; his data are from 2024 and earlier and could be updated as recently founded companies raise money. It\u2019s also possible more Canadian-based founders are registering holding companies in the U.S. and saying they are based there while mostly building in Canada.<\/p>\n

Other observations point to a rebound. Local tech hubs such as Calgary and St. John\u2019s are thriving. Invest Ottawa\u2019s Ignition boot camp for startups is receiving up to five times more applications than the 20 available spots per quarter. \u201cWe\u2019re seeing so much momentum and growth,\u201d said chief executive officer Sonya Shorey.<\/p>\n

Many efforts are under way to re-energize Canadian tech hubs. That includes the creation of a new venture-capital firm in Waterloo called Barn VC, led by entrepreneur and startup booster Jesse Rodgers, that intends to invest $50,000 apiece in 50 early-stage founders. He also manages a space in Kitchener, Ont., that hosts weekly meetings of Socratica, a local collective that brings together engineers, artists and designers.<\/p>\n

Open this photo in gallery:<\/a><\/p>\n

Simple Ventures co-founders Mike Katchen, left, and Rachel Zimmer, right, along with leaders of three startups Simple has backed: Ashley Boyce, CEO of Zero Collective, Melissa Gallagher, CEO of Alma Care and Matt Himel, CEO of Harvest.Laura Proctor\/The Globe and Mail<\/p>\n

In Toronto, Wealthsimple CEO Mike Katchen and tech entrepreneur Rachel Zimmer have founded Simple Ventures, raising $15-million from investors including Toronto-Dominion Bank, Sun Life, Sobeys and several Canadian entrepreneurs. Their plan is create and fund 10 companies that can replicate successful business models from other countries. \u201cWe co-founded Simple because we\u2019re deeply worried about the future of our country,\u201d Ms. Zimmer said. \u201cWe decided instead of talking on panels about it, let\u2019s do something.\u201d <\/p>\n

Anthropic\u2019s valuation more than doubles to $183-billion after raising $13-billion<\/a><\/p>\n

Shopify, meanwhile, hosts weekly \u201cBuilder Sunday\u201d events at its Montreal and Toronto offices that draw hundreds of entrepreneurs. \u201cAll of them are planning to build their companies in Canada,\u201d said Shopify president Harley Finkelstein. <\/p>\n

But there is a broad consensus among sector leaders that much needs to be done to make Canada a more competitive place to build a tech business. The U.S. offers many advantages for founders over Canada: Capital is abundant, the climate is more business- and founder-friendly, and the breadth of thriving tech companies in the Bay Area and New York is an irresistible draw. There is less red tape and fewer regulatory roadblocks. Governments and businesses are more willing to buy from startups. <\/p>\n

Meanwhile, Canadian tech entrepreneurs felt betrayed last year when the federal government proposed to increase taxation on capital gains after years of mounting deficits and spending increases. The U.S. government, in contrast, raised the tax exemption on capital gains by founders this year to US$15-million. While Prime Minister Mark Carney cancelled the Canadian tax change, its proposal by predecessor Justin Trudeau \u201cwas a low-water mark for startup entrepreneurs\u2019 confidence in the federal government,\u201d said Benjamin Bergen, president of the Council of Canadian Innovators.<\/p>\n

\u201cMy takeaway is founders aren\u2019t fleeing Canada, they are fleeing the friction that Canada has created,\u201d said Lucy Hargreaves, CEO of Build Canada, a fledgling organization that has posted a series of memos from accomplished founders outlining how governments could improve Canada\u2019s competitiveness. \u201cIf we keep pushing our builders away, we\u2019re exporting our future prosperity.\u201d<\/p>\n

One such company is Aalo Atomics, founded in 2023 by Toronto\u2019s Matt Loszak to rapidly assemble nuclear plants to electrify data centres. He first pitched the idea at home but got a <\/b>cold reception from investors and utility Ontario Power Generation. He moved his company to Texas, raised US$136-million and got approval from the U.S. <\/b>Department of Energy to build a power plant. \u201cWe wouldn\u2019t have been able to raise $136-million so quickly in Canada,\u201d Mr. Loszak said. \u201cThat would have slowed us down.\u201d<\/p>\n

Then there is Turkish-born Can Uncu, who co-founded AI pharmacy-automation startup Asepha in 2023 and dropped out of his studies in <\/b>computer science at the University of Toronto to build it. With his temporary work visa expiring, he tried to get a startup visa in Canada or an O-1 in the U.S. for individuals with extraordinary abilities. The processing time in Canada was three years. He got his U.S. visa in 13 days. Now he\u2019s relocating his company to the U.S. \u201cI love Toronto, but I also want to make the best of my talent.\u201d <\/p>\n

\u201cEvery founder who leaves Canada is one less <\/b>person <\/b>creating jobs, paying taxes and building prosperity here,\u201d Ms. Hargreaves said. \u201cWe should be treating startups the way we treat our natural resources. They are a strategic asset that underpins our future economy.\u201d <\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Gideon Hayden, co-founder and managing partner at Leaders Fund, which found that just…\n","protected":false},"author":2,"featured_media":88763,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[178],"tags":[4320,4309,4321,9,4302,4322,79,995,4301,4314,4315,4311,4303,4300,179,2597,18,236,440,4313,4307,4333,4304,4305,3428,19,17,4310,3521,3136,4323,4306,4328,4329,4331,4326,4330,4324,4327,430,4317,4318,790,4316,4325,4308,82,4319,4312,4222,66,4332],"class_list":{"0":"post-88762","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-entrepreneurship","8":"tag-alberta","9":"tag-arts-news","10":"tag-bc","11":"tag-breaking-news","12":"tag-breaking-news-video","13":"tag-british-columbia","14":"tag-business","15":"tag-canada","16":"tag-canada-news","17":"tag-canada-sports","18":"tag-canada-sports-news","19":"tag-canada-trafficcanada-weather","20":"tag-canadian-breaking-news","21":"tag-canadian-news","22":"tag-economy","23":"tag-education","24":"tag-eire","25":"tag-entrepreneurship","26":"tag-environment","27":"tag-federal-government","28":"tag-foreign-news","29":"tag-globe-and-mail","30":"tag-globe-and-mail-breaking-news","31":"tag-globe-and-mail-canada-news","32":"tag-government","33":"tag-ie","34":"tag-ireland","35":"tag-life-news","36":"tag-lifestyle","37":"tag-local-news","38":"tag-manitoba","39":"tag-national-news","40":"tag-new-brunswick","41":"tag-newfoundland-and-labrador","42":"tag-northwest-territories","43":"tag-nova-scotia","44":"tag-nunavut","45":"tag-ontario","46":"tag-pei","47":"tag-photos","48":"tag-political-news","49":"tag-political-opinion","50":"tag-politics","51":"tag-politics-news","52":"tag-quebec","53":"tag-sports-news","54":"tag-technology","55":"tag-travel","56":"tag-trudeau","57":"tag-us-news","58":"tag-world-news","59":"tag-yukon"},"share_on_mastodon":{"url":"","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/88762","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=88762"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/88762\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/88763"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=88762"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=88762"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=88762"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}