Tuesday, 14 February 2017

Canadian Start-Up Cities Need a Venture Capital Revolution

As seen with cities like Toronto, Montreal, Vancouver, Calgary, Ottawa and Waterloo, Canada's start-up areas are rapidly expanding and are up to par with some of the best start-up ecosystems around the world. The major difference between Canadian start-up cities compared to global start-up cities is the difference in venture capital. "Over the past few years, $2 billion in venture capital has been invested in Canadian start-ups annually. That's just 6% of the U.S. total." (Florida & King, 2015) Richard Florida and Karen King depict the major Canadian start-up setback in their article Canada's Cities Need a Venture Capital Revolution. Canada ranks just fifth in the world in venture capital, behind the U.S., UK, China and India.


In relation to Waterloo, venture capital is a vital factor towards the success and development of start-ups and tech companies. Florida and King state that Canada's major entrepreneurial tech cities match up with global hub cities in terms of the fundamentals required to successfully develop, such as having a renowned university to participate in research (Florida & King, 2015). "What is missing is the basic connective fibre needed to pull together and mobilize these assets." (Florida & King, 2015) Therefore, it is evident that Waterloo is in need of and increase in venture capital in order to effectively develop as a tech entrepreneurial ecosystem.

I have attached a link to the article Canada's Cities Need a Venture Capital Revolution here: https://www.thestar.com/opinion/commentary/2015/11/17/canadas-cities-need-a-venture-capital-revolution.html

References

Florida, R., & King, K. (2015). Canada's Cities Need a Venture Capital Revolution. The Toronto Star, Retrieved from https://www.thestar.com/opinion/commentary/2015/11/17/canadas-cities-need-a-venture-capital-revolution.html



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3 comments:

  1. Unknown15 February 2017 at 07:01

    Interesting read. No question that these startups require funding to get ideas off the ground and build teams that can start to deliver to the vision. Money will come when ideas are solid and there seems to be profit to be made, but I think the issues and risks are around ideas that may seem too groundbreaking and unfeasible -- at least when it comes to turning a profit. I found this article an interesting perspective on this whole topic

    http://timesofindia.indiatimes.com/trend-tracking/venture-capital-world-tough-year/articleshow/56514787.cms

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  2. Unknown16 February 2017 at 23:05

    This post brought up a lot of interesting ideas, and I while I understand that Canada is not really on the same playing field as the U.S, it shocked me to see that the amount of venture capital we've invested in startups is only 6% of what the U.S contributes. I think that going forward, people need to realize that a lot of venture capital can come from the government. Venture capitalists have convinced policy makers and much of the mainstream media that they are the entrepreneurial force in the knowledge economy, when really they are just benefiting from low rates placed upon capital gains.

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  3. Unknown17 February 2017 at 14:52

    Startups in Waterloo are definitely lacking in venture capital when it comes to developing a stronger tech entrepreneurial ecosystem. As I was researching articles outside of the course material, I came across a number of number of articles that explained how many entrepreneurs will turn to Silicon Valley to receive capital from a large network of investors. Similar to how aspiring actors turn to Hollywood for their large pool of opportunities.

    Here is a link to the article: http://business.financialpost.com/fp-tech-desk/why-three-innovators-are-running-their-companies-in-waterloo-instead-of-silicon-valley?__lsa=6cda-f592

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