VC Funding Doesn’t Reflect Talent in Toronto and KW: Minister

Silicon Valley startups are eagerly snapping up engineering talent from the University of Toronto and University of Waterloo. But investors from California are not, in turn, boarding planes to Toronto with money in tow.

“We should be beating VC investors off with a stick in Ontario,” Brad Duguid, the Ontario Minister of Economic Development, told the Venture North conference.

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Duguid said Californian VCs who value Ontario tech grads should come to the Toronto and Kitchener-Waterloo “supercorridor” and “kick the tires.”

Engineering talent in southern Ontario is highly sought after in the Valley. “How do we get folks in the Valley to get out from behind their desks and come up here?” he said. “As soon as they discover this ecosystem, they’re going to want a presence here.”

The Talent Is Here, the Money Isn’t

Venture North, held at the MaRS Discovery District, aims to entice VCs outside of Ontario to fund local AI, fintech, retail and SaaS startups.

Some Silicon Valley investors, such as 8VC, have described Toronto and KW as having a density of “technical talent” and are making the area a priority. Companies across Canada raised $734 million USD ($881 million CAD) in Q1 2016, but this is dwarfed by the $3.04 billion USD raised by Silicon Valley alone in the same period.

Put another way, one region of California raised roughly four times as much in three months as every startup in Canada combined. That gap matters because talent and money tend to pull on each other. When a Waterloo graduate can find more funded startups to join in California, there’s a real risk that the companies they might have built in Ontario get built somewhere else instead.

Why Investors Stay Away

“Too cold” and “too far” are initial resistances from foreign investors that Duguid hears. But more publicity is needed too — and that’s partially down to startups themselves.

Distance isn’t a trivial objection. Early-stage investors like to meet founders often, sit on boards and help with hiring, and many prefer companies they can reach in an afternoon. That’s one reason events like Venture North exist: to bring the investors to the companies, at least once, and make the case in person.

The Humility Problem

Razor Suleman, CEO of Next 36 and founder of SF-based Achievers, said that natural Canadian humility was a major barrier to publicizing the work being done by startups in southern Ontario.

Suleman started the Spotlight Awards after returning from California to help people get over their reticence to boast: “Six months in Silicon Valley will beat that out of you.”

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Suleman knew both sides of the story. Achievers began in Toronto in 2002 as I Love Rewards, grew into an employee recognition software company backed by investors including Sequoia Capital, and was sold to Blackhawk Network in 2015.

What Happened Next

The years after Venture North gave Toronto a much stronger story to tell, especially in AI. In 2017, the Vector Institute launched in Toronto with $135 million in funding from Canadian governments and more than 40 industry partners. It was built on the scientific foundation laid by Geoffrey Hinton and fellow University of Toronto researchers.

In 2024, Hinton shared the Nobel Prize in Physics with John Hopfield for their work on artificial neural networks, the technology underpinning today’s AI boom. It’s hard to imagine a clearer signal that the “technical talent” 8VC described was real.

The funding picture has grown too, though it’s still small next to the U.S. According to the Canadian Venture Capital and Private Equity Association, CAD $8.0 billion was invested across 571 venture capital deals in Canada in 2025. Ontario accounted for just over half of the total, and the CVCA noted that later-stage deals had higher participation from non-Canadian investors. That’s the very thing Duguid was asking for in 2016: outside money coming in to back local companies as they grow.

Duguid himself announced in September 2017 that he wouldn’t run in Ontario’s 2018 election, ending 15 years as a member of the provincial legislature.

What It Means for Canadian Founders

Suleman’s advice still stands. Investors can’t back what they’ve never heard of, and a founder who undersells their company makes a distant investor’s decision even easier. Tell the story clearly, share your numbers, and go where the investors are when they won’t come to you.

At the same time, the talent argument that Duguid made is stronger now than it was then. Founders in Toronto and Waterloo don’t need to apologize for where they’re building. They need to make sure the people with the money know about it.