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Five ways Canada’s startup ecosystem can catch up with the world’s top innovators

Five ways Canada’s startup ecosystem can catch up with the world’s top innovators

Posted by PanamericanWorld on February 18, 2016

Another year is drawing to a close — a time when most of us resolve to do things better in the coming year, whether its in our personal lives or at work.

Looking back on 2015, the Canadian startup ecosystem has had a number of reasons to celebrate, including Shopify’s initial public offering and several venture capital backed startups attracting major follow-on rounds. However, when it comes to startup success Canada still has a long way to go to catch up with the world’s top players.

While I can’t create New Year’s resolutions for an entire startup ecosystem, here are five things Canadian startups could benefit from in 2016:

The continued evolution of corporate engagement with startups.Corporations have long attended startup events to monitor cutting-edge ideas. Hopefully, we’ll see a shift in 2016 to meaningful programming and deeper relationships that lead to applied innovation in corporate Canada. MaRS Discovery District in Toronto has shown what’s possible by creating focused clusters, including one for FinTech in the heart of Canada’s banking sector. It signed on global tenants including Johnson and Johnson Innovation’s JLABS incuabator. An evolution toward specialized centres of excellence will yield better results in the next decade and make the country’s biggest corporations and most innovative startups more competitive.

 
Laura Pedersen/National Post

Laura Pedersen/National PostMarcus Daniels, founder and chief executive of the pre-seed venture capital fund Highline.

 

The growth of quality pre-seed investors. This can be facilitated with the widespread adoption of the SAFE  (simple agreement for future equity) model for term sheets. Term sheets for early stage investments in startups are far too complicated. This has a significant impact on pre-seed deals and usually means things take far too long to get done. Adaptation of SAFE docs created by U.S. accelerator Y-Combinator would standardize terms for pre-seed rounds and have a great impact on the Canadian ecosystem.

More female funders and more attention to diversity. Go to any gathering of venture capitalists in this country and you run into an overwhelming number of middle-aged white guys, many of whom are great people. However, the startup ecosystem is missing the dynamism and perspective women bring to investing, especially those who have entrepreneurial tech experience. Let’s hope more get in the game in 2016 and that their successes are justly celebrated.

For provincial governments to do more to promote STEM subjects (science, technology and math). There is a constant global demand for great engineers and developers. This country should actively be responding to that demand with massive support for applied technical education at all age levels. We’re lagging other parts of the world when it comes to innovation and the system our children are being taught in is part of the issue. This is a very safe investment — a no-brainer — and one that should get started on right away.

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