Issuu

ISSUE NO. 5

OCTOBER 2026

STARTUP GR WTH Canada’s Premier Startup & Scale-Up Magazine

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Dear Readers, I have met founders with incredible technology and ideas that could change entire industries, yet they are still struggling to get into the right room. And that what motivates me. Through my work with entrepreneurs across Canada and beyond, I have seen incredible innovation, but also the frustration of founders trying to find their first investor, their next customer, or simply someone willing to believe in what they are building. In this fifth edition of Startup Growth, I invite you to explore some conversations we need to be having. Who really controls venture capital? Why should Canadian startups be looking East? Is AI delivering real business value, or are we still caught up in the excitement? And with a $53.9 billion HealthTech opportunity, what will it take for Canadian innovators to lead? We also take you inside the ecosystems, from MaRS to regional innovation hubs, helping turn ambitious ideas into businesses. For me, Startup Growth has always been about more than publishing success stories. It’s about making room for voices we don’t hear often enough, asking questions that matter, and connecting people who might otherwise never cross paths.

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That same purpose came to life through the Startup Growth Awards. It was a privilege to showcase inspiring startups and the people behind them. Congratulations to all nominees, finalists, and winners—your stories deserve the spotlight.

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Because the next great Canadian success story may already be out there. It just hasn’t been discovered yet.

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IN THIS ISSUE Startup Growth Magazine

Designing a Tech Stack That Can Scale With Regulation

Why Canadian Startups Must Look East as Growth Forecasts Surge

Navigating the Enterprise AI Reality Check: On the Road to ROI

A Founder’s Guide to Canadian Innovation Funding in 2026

Building Canada’s Next Competitive Layer Through AI Infrastructure

Can Canada’s New Growth VCCI Unlock More Scale-Up Funding?

IN THIS ISSUE Startup Growth Magazine

06 MaRS Discovery District: Scaling Innovation at the Heart of Toronto’s Startup Ecosystem

Smarter Stays, Stronger Margins: How KoruStay Empowers the Modern Host

ECONOMIC DIPLOMACY CANADA <-> UAE CORRIDOR

From Al Experiments to Everyday Business Leverage

The Future Of Venture Capital Depends On Who Controls The Capital

20 From Public Research to Market Leadership in Canada

16 One Employee in Toronto: The TwentyFive-Year Build of Google Canada

Canada’s Biotech 66 Why Companies Struggle to Scale

Fonds Impulsion and 63 Québec’s the Future of Co-Investment

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MaRS Discovery District: Scaling Innovation at the Heart of Toronto’s Startup Ecosystem By SK Uddin Considered one of the largest urban innovation hubs in North America for science- and technology-based entrepreneurship, MaRS Discovery District connects entrepreneurs, researchers, investors, and corporations to accelerate the commercialization of breakthrough technologies. The organization was established in 2000 and founded in Toronto in 2001 by cardiologist, academic, and civic leader Dr. John Evans and a group of visionary business, academic, and community leaders, with the audacious goal of turning Canada's top-notch research into globally competitive businesses. The founders donated $14 million and rallied further support from the Government of Ontario, the University of Toronto and prominent corporate partners to bring the organization to life. The MaRS Centre officially opened in 2005.

With more than 1.5 million square feet of innovation space across MaRS Centre and MaRS Waterfront, MaRS is now widely acknowledged as the largest urban innovation hub in North America. The hub supports ventures working in fields where Canada has significant scientific and commercial potential, including health and life sciences, cleantech innovation, and technology-driven solutions for the economy. MaRS helps firms transition from early-stage concepts to globally scalable enterprises by providing founders with market access, financial connections, and expertise.

6 - Startup Growth - October 2026

Innovation & Entrepreneurship

Jobs, Capital, and Economic Growth The extent of MaRS's influence indicates its role as a national platform for expanding Canadian innovation. The MaRS ecosystem currently supports over 1,200 startups, according to the organization's most recent impact data. Together, these businesses employ more than 33,000 people and are among the most promising technology startups emerging from Canadian academic institutions. Funding raised by MaRS-supported ventures in 2025: $1.8B

Funding raised by MaRS-supported ventures since 2020: $14.7B Revenue generated by MaRS-supported ventures in 2025: $1.4B Revenue generated by MaRS-supported ventures since 2020: $10B+ FTEs employed by MaRS-supported ventures in 2025: 31,000+

MaRS also operates MaRS IAF (Innovation Accelerator Fund), one of Canada’s most active early-stage investors. Launched in 2008,

MaRS IAF is a sector-agnostic, multi-stage fund that backs ambitious founders building breakthrough technology companies across software, hardware and emerging sectors, with a strong focus on Ontario-rooted companies. MaRS IAF invests from the earliest stages through seed.

Alongside capital, MaRS IAF provides founders with hands-on guidance, deep ecosystem networks, customer connections and

global platform access to help build globally competitive companies. As an evergreen fund, it consistently deploys capital and supports new investments over the long term.

Additionally, the innovation cluster has contributed to the creation of internationally renowned businesses. It's very encouraging to see four Canadian companies achieve new heights. Wattpad, ecobee, StackAdapt, and Ironshore Pharmaceutics (previously Highland Therapeutics) have all benefited from MaRS' support, particularly through the Momentum initiative, which was founded in 2020 to provide scale-stage ventures with tailored, nondilutive support. Momentum provides tailored support to companies during this critical transitional period Momentum is funded partially by the Canadian government through the Federal Economic Development Agency for Southern Ontario (FedDev Ontario). It supports more than 100 active companies working across sectors from cleantech and health to enterprise, SaaS and Edtech, to name a few, with access to a network of 100+ functional and volunteer advisors. They all have one thing in common: they want to grow their firms and make a difference in the Canadian innovation economy.

Celebrating 25 Years of Innovation and Impact MaRS is celebrating 25 years of

innovation and has established a remarkable history as a catalyst for Canadian entrepreneurship, technology, and economic growth. MaRS has supported founders, advanced new ideas, and contributed to the development of a flourishing innovation ecosystem that continues to drive substantial impact in Canada and beyond.

How MaRS Helps Founders Scale MaRS provides a wide range of services designed to help startups

grow from early-stage ventures into globally competitive businesses. The

MaRS Capital Program, which supports high-potential businesses in raising venture capital at the seed and Series A stages, is the cornerstone of that support, offering one-on-one

fundraising preparation, investor introductions, and closing support at no cost and without taking equity. For more established ventures, MaRS provides strategic advisory support, peer networks, and capital-readiness guidance aimed at companies scaling toward $100 million in revenue. MaRS's venture services division offers practical advising assistance in addition to funding. Entrepreneurs are advised on: Tailored market intelligence and data-driven industry research Go-to- market strategy and customer acquisition Regulatory navigation and commercialization routes 7 - Startup Growth - October 2026

Innovation & Entrepreneurship Fundraising strategy, investor introductions and capital readiness Leadership development, mentorship and peer community access Hiring and talent attraction support This customized support helps founders avoid common startup problems and achieve key milestones more

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quickly.

Additionally, the MaRS ecosystem provides companies with direct access to academic institutions and corporate partners, enabling them to test innovations, develop solutions, and acquire early enterprise clients. One of the main benefits for many businesses is the collaborative

atmosphere itself. MaRS Connect, the organization's platform for startups, investors and corporate partners, enables innovation scouting and deal discovery across the MaRS portfolio, giving accredited investors and corporate leaders direct access to traction-ready companies.

Expertise In Health, Climate, and Emerging Technologies

Together, these programs connect founders not just to capital, but to the networks, expertise and enterprise

MaRS supports startups across a wide range

One MaRS-supported founder described the experience

areas where Canada has significant scientific capabilities and strong global market potential: cleantech and climate, health and

relationships needed to compete globally.

this way: “Being part of the MaRS ecosystem connects you to advisors, investors and other founders who understand the journey. That network can accelerate a company’s growth faster than trying to build everything alone.”

MaRS’ extensive events programming further strengthens this ecosystem. A flagship among these events is MaRS Impact Health, one of Canada’s largest showcases of early-stage health innovation, bringing together entrepreneurs, investors, clinicians, global technology executives, and policymakers to advance commercialization across biotech, digital health, and medical devices. The popular MaRS Mornings speaker series offers the broader community regular access to candid conversations with founders and innovators building Canada’s next generation of companies.

of sectors. Within that broad community, MaRS has developed specialized programming and deep domain expertise in three high-impact

life sciences and emerging technologies such as AI and advanced materials. These sectors tend to involve longer commercialization timelines, complex regulatory pathways and higher capital requirements, making the targeted support MaRS provides particularly valuable.

Another important area of study is artificial intelligence. MaRS has also been closely tied to Canada’s emergence as a global AI hub. The Vector Institute for Artificial Intelligence was housed at the MaRS Centre from 2017 until 2024, when it relocated to the Schwartz Reisman Innovation Campus. MaRS continues to support AI startups. MaRS also advocates for policies and conducts research to support Canada's innovation ecosystem

8 - Startup Growth - October 2026

Innovation & Entrepreneurship The organization has noted in recent studies that Canada's health tech sector is at a "make-or-break moment," pointing out that funding was down. Investment in 2024 was largely concentrated among a few businesses. By drawing attention to these structural issues, MaRS establishes itself as a thought leader influencing Canada's innovation policy in addition to serving entrepreneurs.

Visionary Leadership in Research And Founding Global Companies Dr. John Evans, a cardiologist, academic leader, businessperson, civic leader, and former president of the University of Toronto, is credited with founding MaRS. Evans

recognized that although Canada's research institutes were making top-notch discoveries, they lacked the infrastructure

Why MaRS Matters to Canada’s Startup Future MaRS Discovery District is a prime example

of how location-based innovation clusters can propel national economic growth within Canada's innovation ecosystem. MaRS gives startups the tools they need to transition from groundbreaking concepts to successful businesses by combining physical infrastructure, professional advisory services, access to venture capital, and ecosystem engagement. MaRS has grown into one of the cornerstones of Canada's startup economy,

necessary to make them commercially viable.

supporting over 1,200 firms that have collectively raised billions of dollars and created tens of thousands of jobs.

Evans helped develop MaRS as a link between academia, business, and investors while serving as the organization's founding board chair. Under new leadership, the

Canada's economic future will depend on

organization continues to pursue that goal. Grace Lee Reynolds, who previously held senior leadership roles at MaRS, returned to the organization in 2024 and was appointed CEO in February 2025. She is focused on

enhancing support for science and technology ventures, fostering commercialization and strengthening MaRS’s role

its ability to translate research into actual businesses as the global race for technological supremacy heats up. MaRS

Discovery District, which supports Canadian innovators in creating the next wave of global technology champions, lies at the heart of that endeavour.

as a convenor of industry, government and research. The

objective remains to turn Canada's scientific prowess into globally competitive businesses, as Evans once envisioned. Your engagement helps strengthen a growing ecosystem of founders, builders, and business leaders. Startup Growth is designed to deliver practical insights, emerging trends, and realworld strategies that support entrepreneurial success. Click here to subscribe and follow our official channel. Stay connected to us for the latest developments in the startup landscape. Your continued support helps us spotlight innovation and opportunity across Canada.

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Disclaimer: The content published on StartupGrowth.ca is based on publicly available sources and is provided for general informational purposes only. Startup Growth does not endorse, recommend, or guarantee any products, services, organizations, or claims mentioned. Readers are encouraged to conduct independent research and exercise due diligence before making financial, investment, or business decisions. 9 - Startup Growth - October 2026

Designing a Tech Stack That Can Scale With Regulation By Hammad Siddiqui For a regulated startup, compliance

cannot be a task left until the week before a major client contract, fundraising round or product launch. The technology stack is also a trust stack, particularly for businesses in health technology, financial technology, biotechnology, artificial intelligence, insurance, legal technology and other sensitive industries. Enterprise customers, hospitals, banks,

investors, regulators and commercial partners increasingly need to know what data a company holds, why it collects it,

where it is stored, who can access it, how it is protected and what happens when something goes wrong. An innovative product that is difficult to approve, audit, integrate or secure will struggle to scale. The good news is that early attention to compliance can become a competitive advantage. Startups that build privacy, security, permissions, documentation and quality controls into their products from the beginning can shorten enterprise sales cycles, avoid costly redesigns, strengthen investor confidence and enter regulated markets with greater credibility. The objective is not to create bureaucracy. It is to establish a lightweight but rigorous operating foundation that can grow with the company. The Office of the Privacy Commissioner of Canada advises businesses to li

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Start With Data, Not Tools Before choosing cloud providers, AI models, customer relationship software, analytics platforms or payment systems, founders should understand their data. They should identify the personal, confidential, financial,

therapeutic, operational or proprietary information they collect; why it is necessary; where it enters the system; where it is stored; who can access it; how long it is retained; and which suppliers or partners receive it. mit personal-information collection, obtain meaningful consent, use appropriate safeguards and establish responsible retention and disposal practices under Canada’s federal private-sector privacy law, the Personal Information Protection and Electronic Documents Act, or PIPEDA. A simple data map can prevent significant problems later. If a startup cannot explain its data flows, it may struggle with a hospital security questionnaire, an enterprise procurement review, an assessment of an AI provider or an investigation following a potential breach. The guiding principle is data minimization: collect only what the product actually needs. 10 - Startup Growth - October 2026

Technology & Compliance

Build Privacy Into the Product Privacy by design means building privacy into a product as it is developed, rather than addressing it after sensitive information has been collected at scale. Before launch, a health-tech platform should consider whether it needs identifiable patient information, whether data can be pseudonymized, who can access clinical records and how consent will be collected and withdrawn. A fintech product should establish how it will handle identification information, transaction data, credit-related information, fraud signals and third-party integrations. Meaningful consent goes beyond placing a long privacy policy behind a checkbox. Users should

understand what information is collected, why it is necessary, how it will be used and whether it will be shared. The explanation should reflect the sensitivity of the information and the user’s reasonable expectations.

Centralized logging of critical operations, administrative changes and access to sensitive documents. eate strong reasons to choose Canadian storage or restrict cross-border processing.• Tested backups and a documented recovery process. A process for updating cloud infrastructure, devices, applications and third-party software. An incident-response plan that identifies who investigates, communicates and makes decisions during a security incident.

The Cyber Centre also emphasizes phishingresistant multi-factor authentication, particularly for administrators and users with access to

critical software-as-a-service data. That matters because a compromised administrator account can expose client data, source code, cloud infrastructure and financial systems at the same time.

Founders should also establish a practical privacy

operating model. That includes a designated privacy owner, a public privacy notice, an internal data-

handling policy, a retention schedule and procedures for access, correction, deletion and complaint requests. These fundamentals make privacy easier to manage as the product and team grow.

Cloud, Vendors and Data Residency Choosing a cloud provider is more than a technical decision. It involves risk, contractual

obligations, data location, service continuity and customer trust. Data residency refers to where data is stored or processed. Canadian law does not impose one

Security Is a Product Requirement Cybersecurity is not simply an IT issue. It is a product requirement and a business-continuity concern. The Canadian Centre for Cyber Security recommends basic cyber-hygiene practices including regular software updates, multi-factor authentication, secure backups and phishing prevention. A regulated startup’s security baseline should include: Multi-factor authentication across company systems, particularly for administrator accounts. Role-based access so employees can access only the data and functionality required for their jobs. Encryption of data in transit and at rest, where appropriate. Secure password management and a prohibition on shared user accounts.

universal requirement that all private-sector data remain in Canada. However, industry rules, provincial health-information legislation, customer contracts, public-sector procurement requirements and risk assessments can cr Founders should ask cloud and software providers: Where is client data stored, backed up and processed? Can the company select a Canadian data region? Which subcontractors can access the data? How is data encrypted and isolated? What security logs, reports and breachnotification commitments are available? What happens to the data when the contract ends? 11 - Startup Growth - October 2026

Technology & Compliance The Canadian Centre for Cyber Security provides guidance on cloud-security risk management, assessment and protective measures. Before sensitive information is sent to an external platform, startups should maintain a vendor list and conduct appropriate due diligence. Where is client data stored, backed up and processed?

Can the company select a Canadian data region? Which subcontractors can access the data? How is data encrypted and isolated? What security logs, reports and breachnotification commitments are available? What happens to the data when the contract ends? Documentation is not busywork. It shows that a company can repeat a process, identify problems

and improve responsibly.The Canadian Centre for Cyber Security provides guidance on cloud-security risk management, assessment and protective measures. Before sensitive information is sent to an

external platform, startups should maintain a vendor list and conduct appropriate due diligence. Regulated products must be explainable after the fact. That requires audit trails: reliable records

showing who viewed, changed, approved, exported or deleted critical information and when. For a health-tech company, an audit log might record access to patient information, clinical changes, consent updates and administrative actions. A fintech company may need records of payment approvals, identity-verification actions, account changes and fraud-review decisions. An AI product may need to record the model version, data source, input category, user action, output, human review and, where appropriate, the ability to overturn a decision. Quality management connects those records to consistent performance. At an early stage, founders do not need a large compliance department. They do need essential documentation, including product requirements, risk assessments, security policies, development procedures, testing evidence, release approvals, training records and incident reports.

Make Compliance Commercial The most effective startups turn regulatory readiness into a sales asset. Founders should build a trust package before enterprise buyers ask for one. It could include a security overview, architecture diagram, privacy summary, data-flow map, list of subprocessors, disaster-recovery overview, incident-response process and answers to common procurement questions. AI-product founders should also define model constraints, evaluation procedures, human-

oversight options, data-use boundaries, monitoring mechanisms and escalation channels for dangerous or unreliable results. The Cyber Centre recommends monitoring for performance changes, model drift, unusual outputs and changing input patterns, while maintaining sufficient logs to investigate incidents.

These materials can help startups respond faster to procurement requests and demonstrate that they understand operational risk.

The Bottom Line For a regulated Canadian startup, a scalable tech stack is not defined by the newest cloud tool or AI model. It is defined by the company’s ability to protect sensitive information, demonstrate

accountable controls, recover from incidents and explain how decisions and data move through its systems. Founders should start small and build deliberately: map data, reduce unnecessary collection, obtain meaningful consent, secure access, assess vendors, maintain audit trails and document critical processes. When compliance is integrated into product design, it becomes less of a late-stage obstacle and more of a foundation for growth. It can build customer trust, accelerate enterprise sales, strengthen partnerships and help a startup scale responsibly.

12 - Startup Growth - October 2026

From Al Experiments to Everyday Business Leverage u Co

Ashraf Amin

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Founder and Host of Toronto Talks and Business Development Professional at Conquest Distributors Inc.

In an exclusive interview with Startup Growth

Ashraf's perspective on Al is shaped by

Magazine, Ashraf Amin, Founder and Host of Toronto

daily use inside real operating

Talks and Business Development Professional at

environments. Through Conquest and

Conquest Distributors Inc., shares a practical

Toronto Talks, he explores how Al can

perspective on moving AI from casual

support customer communication,process

experimentation into everyday business operations.

capture, research, content development,

Interview By Tehmina A Chaudhry Ashraf Amin is the founder and host of Toronto Talks, a Toronto-based business and technology media platform covering Al, entrepreneurship, innovation, money, and the human impact of major technological change. He also works in business

workflow improvement, and decision support. His focus is helping small and mid-sized businesses move beyond casual experimentation and toward repeatable, human-led systems that create meaningful leverage without losing judgment, accountability, or trust.

development at Conquest Distributors Inc., a Canadian SME serving businesses with packaging, shipping, and industrial supply solutions.

13 - Startup Growth - October 2026

s :A

Business Automation You use Al both inside a traditional Canadian distribution business and through Toronto Talks. How has that hands-on experience changed your understanding of what Al is genuinely useful for? Using Al inside both a traditional distribution business and Toronto Talks has made me much more practical about the technology. The real value is often less dramatic than people expect, but more useful. Inside a business, Al is valuable when it helps with work that already exists: drafting

Many businesses use Al occasionally for emails, research, or content but never move beyond experimentation. Why do you think that happens? Many businesses stay in experimentation because the first use cases are easy, while the operating changes are harder. Writing an email with Al is simple. Turning that into a repeatable customer communication process requires standards, context, review boundaries, and trust. Asking Al a research question is easy. Building a reliable research habit that saves time every week requires discipline.

Small and mid-sized businesses are also busy. Owners and teams are dealing with customers, suppliers, staffing, pricing, cash flow, and daily execution. Al can feel like another project unless it is connected directly to existing work. There is also a leadership gap. Someone has to decide where Al belongs, what quality looks like, when a human must approve the output, and how the business will learn from mistakes.

customer communication, summarizing information,

Most companies do not need a huge Al transformation plan to begin. They need one real task, repeated often, where Al can reduce friction,

reducing friction around repeated decisions. It is

What does a useful, repeatable Al workflow look like inside a small or

comparing options, capturing processes, preparing followups, organizing ideas, and

especially

useful when it helps a person move faster without lowering the quality of judgment.

Through Toronto Talks, Al has also become a research and production partner. It helps sharpen questions, structure episodes, test arguments, prepare clips, and think through how technology is changing business and society. The biggest lesson is that Al is most useful when it is connected to real work. Casual experimentation can be impressive, but daily leverage comes when Al becomes part of how work actually gets done.

improve quality, or save meaningful time.

mid-sized business, and where should an owner begin? A useful Al workflow has a clear input, a clear output, and a clear human review point.

For example, a small business might use Al to help handle recurring customer inquiries. The process could be: retrieve the relevant customer context, draft a response, check tone and accuracy, flag anything involving pricing or commitment, and then have a human approve before sending. That is far more useful than simply telling staff to "use Al for emails." Owners should begin with work that is frequent, low-risk, and annoying enough that improvement matters. Good starting points include customer follow-ups, meeting summaries, supplier comparisons, internal process documentation, product descriptions, and first drafts of routine communication. The key is to avoid starting with a giant Al strategy. Start with one repeatable task. Improve it. Decide what the Al can do independently and where human judgment remains required. Once that works, move to the next area. Small improvements repeated daily can become real operating leverage. 14 - Startup Growth - October 2026

Business Automation As Al becomes more capable, where must human judgment, leadership, and accountability remain centraland how can SMEs use the technology without losing that human edge?

Image Courtesy: Ashraf Amin

Human judgment has to remain central wherever consequences, relationships, money, trust, or accountability are involved. Al can help prepare, organize, draft, compare, and challenge ideas. It can make work faster and often better. But leadership still has to decide what You have said Al's real value often comes from many small improvements repeated every day. Can you share an example of how this kind of incremental improvement creates meaningful operating leverage? One example is process capture. In a small business, a lot of knowledge lives inside people's heads: how to respond to a certain customer, how to process a

recurring order, how to handle a supplier issue, or how to make a judgment call on pricing or timing. Al can help turn those repeated actions into clearer operating steps. At Conquest, the value is not simply that Al can draft a response. The bigger value is that after several similar situations, it can help identify the pattern: what information we check, what risks matter, what tone is appropriate, and when something should be escalated.

That creates leverage over time. The next similar task starts from a better place. Less knowledge is lost. Less time is spent reconstructing the same logic. The business gradually becomes more organized. The improvement may be small each time, but the compounding effect matters. Ten minutes saved, fewer errors, clearer communication, and better repeatability across many small tasks can eventually change how the business operates.

matters, what risks are acceptable, what commitments should be made, and how people should be treated.

For SMEs, the best approach is to use Al as an operating partner while keeping clear boundaries. Let Al handle

reversible preparation: research, first

drafts, summaries, options, process documentation, and routine structure. Keep human approval around pricing,

commitments, customer relationships, hiring, financial decisions, public communication, and anything that affects trust.

The businesses that benefit most will be the ones that combine Al's speed with human responsibility.

Al should increase the owner's capacity for better judgment, not replace judgment. Used well, it can make a business more responsive, more organized, and more thoughtful while keeping people accountable for the final decision

Disclaimer: The views expressed in this interview are solely those of the interviewee and do not necessarily reflect the views of Startup Growth Magazine. The content is for general information only and is not professional or investment advice. 15 - Startup Growth - October 2026

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From Public Research to

Market Leadership in Canada By SK Uddin

Canada has scientific expertise,

An anchor company does more than generate revenue. It

insulin and pacemakers to cutting-edge developments in artificial intelligence, quantum technologies, biotechnology, clean technology, and medical devices, Canadian researchers have repeatedly shown they can compete with the best in the world. The harder question is what happens after the discovery. Too often, Canadian research produces intellectual property, early-stage startups, and promising firms that depend on foreign financing, move commercialization work abroad, or are acquired before they grow into significant domestic employers and global anchor companies.

in which successful employees become new entrepreneurs, investors, mentors, and clients for the next generation of businesses. Canada's commercialization challenge is not simply a matter of doing more research. It is about building a structure that moves publicly funded discoveries from the lab to viable, globally competitive Canadian firms.

public research funding, leading institutions, research hospitals, and groundbreaking ideas. From

16 - Startup Growth - October 2026

keeps high-paying jobs, headquarters functions, R&D, manufacturing, supplier ties, experienced executives, and intellectual property ownership in Canada. It creates a cycle

The Gap Between Discovery and Scale Universities and research hospitals exist to generate knowledge. Startups exist to turn knowledge into products, services, and businesses. The two worlds overlap, but they work differently. Academic researchers are rewarded for their publications, grants, teaching, scientific impact, and peer recognition. Founders must build teams, protect intellectual property, identify customer needs, navigate regulations, secure financing, develop products, and generate revenue. A discovery can be scientifically significant without being commercially viable.

Research & Innovation The difficult middle stage is known as translation, which means turning research into something that can be tested, manufactured, sold, adopted, and scaled. It can include prototype development, clinical validation, intellectual property strategy, regulatory planning, customer pilots, product design, market research, and venture

creation. The Pharmaceutical and Life Sciences Sector Task Force says Canada has robust research infrastructure but inadequate coordination across health and innovation responsibilities. The result, the report says, is fragmented funding, translational infrastructure, and industry-academic connections, which weaken the path from health research to venture-backed companies.

Why Commercialization Matters Commercialization is often mistakenly seen as separate from public research. In fact, it is one way research adds value to society. A successful Canadian company can turn knowledge into new therapies, greener industrial processes, and better digital services,

while generating export revenue, skilled jobs, and long-term tax capacity. It can also deliver practical solutions for Canadian consumers and government agencies. The stakes are especially high in life sciences. According to a recent task force report, Canadian life-sciences startups frequently receive seed and early-stage

funding but struggle to find domestic late-stage scale-up capital. The report found that foreign investors accounted for 76 per cent of

The solution is neither to stop entrepreneurs from selling their businesses nor to ban foreign investment. The goal is to give founders genuine alternatives,

such as larger Canadian growth funds, domestic institutional investment, procurement opportunities, experienced executives, manufacturing capacity, and regulations that reward companies for expanding in Canada. When capital and customers are both available at home, founders are more inclined to grow there.

Stronger Translation Infrastructure Translation requires more than a technology transfer office. Researchers need access to entrepreneurs-in-residence,

investors and 67 per cent of deal volume in funding rounds worth more than $50 million.

venture capitalists, legal and intellectual property experts, prototyping facilities, regulatory

Foreign investment is not inherently harmful. International partners can provide capital, experience, and worldwide market access. The problem arises when Canada fails to maintain sufficient domestic

force proposed a federal coordination function for

ownership, capital, and commercial capacity to bargain from a position of strength. When intellectual property and commercialization teams relocate abroad, Canada loses much of the value created by the original research breakthrough.

From Startups to Anchor Companies Canada has produced many venture-backed startups, but building anchor companies takes a longer-term perspective. An acquisition can be a good outcome for founders and investors. However, if the most promising companies sell early, Canada may miss the chance to build globally competitive enterprises that reinvest locally for decades. The task force calls this pattern innovation leakage. It reports that 21 Canadian life-sciences companies were acquired by foreign buyers over the past 15 years in deals above $500 million, with an average transaction value of $1.8 billion. The report presents this as a recurring problem: Canadian ownership often slips away just as companies reach peak value.

professionals, clinical partners, and early customers. The task

translational health research to reduce fragmentation and better align infrastructure and funding. It also called for stronger company-building infrastructure in key innovation hubs. A good incubator can help a researcher become a founder, supporting company formation, market discovery, patent strategy, investor readiness, leadership recruitment, regulatory planning, and pilot development. Access to laboratories, specialist equipment, test facilities, and clinical networks is often critical in deep technology and life sciences. 17 - Startup Growth - October 2026

Research & Innovation Universities should also make the path to commercialization easier to follow. Researchers need clear policies on ownership, licensing, conflicts of interest, equity involvement, and the use of university facilities. The aim is not to push every researcher into starting a company. It is to ensure that those who make economically important discoveries have a viable path to pursue them. Progress should be measured by companies founded, follow-on financing, licensing revenue, patents used in market-ready products, Canadian jobs, retained intellectual property, export sales, and successful scale-ups, rather than by publications or patent filings alone.

Capital That Stays for the Journey Early research funding helps generate new ideas, but as businesses grow, they need different kinds of money. Seed

financing may support a prototype. Venture capital can fund product development and initial market entry. Later-stage finance is needed for manufacturing, global expansion, clinical studies, client acquisition, and major hiring. The

federal Venture and Growth Capital Catalyst Initiative (Growth VCCI) aims to strengthen the financing continuum. Budget 2025 allocated $1 billion to the initiative, including $700 million for funds-of-funds, $200 million for life-sciences venture funds, and $100 million for emerging fund managers.

The planned life-sciences stream requires fund managers to

raise at least $1 of private capital for every $1 of Growth VCCI funding. Government participation would be capped at onethird of a fund's size, a design meant to draw in private

For a Canadian startup, customers can

matter even more than investors. Public procurement can play a major role in commercialization, particularly in health, infrastructure, defence, cleantech, and digital government. The Health and Biosciences Economic Strategy Table argues that Canada's procurement culture often prioritizes the lowest upfront price over long-term value, such as patient outcomes, system savings, productivity, and economic benefits. It advocates value-based procurement and a health

procurement innovation agency to help innovative products gather the evidence needed for adoption. This matters because an early Canadian

customer can test a product, provide feedback, generate revenue, and establish the reference case needed to win global business. Without domestic adoption, founders may have to find their first large customers abroad, even when Canadian public research funding helped develop their invention. Procurement must remain

fair, competitive, transparent, and focused on public value. But a well-designed system can judge innovation on total outcomes rather than the lowest upfront price alone.

Image Courtesy: Canva

investors, including pension funds. The approach reflects an important point: public money can ignite the market, but long-term commercialization requires private capital that can support companies through multiple financing rounds.

Procurement Is Commercialization Policy

18 - Startup Growth - October 2026

Research & Innovation

A Better Canadian Pipeline Canada can improve commercialization by joining its policies into one coherent path: Fund high-quality basic research

while supporting researchers who want to pursue commercial opportunities. Image Courtesy: Canva

Measure commercialization outcomes consistently at publicly funded research institutions. Expand incubators, venture builders, prototype facilities, and sector-specific support.

Expand access to domestic seed, growth, and late-stage funding. Encourage pension funds and institutional investors to back talented Canadian fund managers.

Create early market opportunities through public procurement, pilot initiatives, and testing environments.

Keep intellectual property, talent, and high-value operations in Canada while remaining open to international investment and trade. Coordinate federal, provincial, academic, health-care, and private-sector initiatives toward common goals. The system should make it simpler for a discovery to grow into a company, and for that company to become a Canadian anchor firm.

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The Bottom Line Canada's research system is a national strength, but discoveries alone do not produce globally competitive businesses. Commercialization requires entrepreneurial talent, clear intellectual property pathways, practical incubators, patient

financing, early customers, regulatory preparation, and government policies that promote long-term domestic value creation. The goal is not to discourage foreign investment or block successful acquisitions. It is to give Canadian innovators a viable option to scale at home. If Canada can link its research excellence to funding, procurement, and commercialization capabilities, it can produce more than promising discoveries. It can build anchor companies that sustain economic value, skilled jobs, and innovation momentum in Canada.

Your engagement helps strengthen a growing ecosystem of founders, builders, and business leaders. Startup Growth is designed to deliver practical insights, emerging trends, and real-world strategies that support entrepreneurial success. Click here to subscribe and follow our official channel. Stay connected to us for the latest developments in the startup landscape. Your continued support helps us spotlight innovation and opportunity across Canada. Disclaimer: The content published on StartupGrowth.ca is based on publicly available sources and is provided for general informational purposes only. Startup Growth does not endorse, recommend, or guarantee any products, services, organizations, or claims mentioned. Readers are encouraged to conduct independent research and exercise due diligence before making financial, investment, or business decisions.

One Employee in Toronto:

The Twenty-Five-Year Build of Google Canada By Tehmina A Chaudhry

Google opened its first Canadian office in 2001 with a single hire. Today it operates engineering, AI research and cloud teams across the country — and its products underpin how hundreds of thousands of Canadian businesses find customers.

Image Courtesy: Canva

For a Canadian small business, the most consequential decision anyone made about their marketing may have been made by someone they will never meet. When a customer in Barrie searches for a plumber, or a shopper in Halifax looks for a bike repair shop, the mechanics that determine whether a local business appears — and how — are the difference between a full calendar and a quiet week. Google Canada's economic significance is largely this: it is the layer between Canadian businesses and Canadian demand.

Company Journey: From a Single Desk to a National Engineering Presence Google opened its first Canadian office in Toronto in 2001 with one

employee in a small workspace. It was, at the time, a search company with an advertising business still finding its shape.

Expansion followed the country's talent. Google opened its Montréal

office in 2004 with three employees. In 2005 it set up in Waterloo, Ontario — Canada's established technology hub — and over the following two decades became a genuine part of the Waterloo region's engineering community, hiring locally to build products used worldwide and contributing volunteer hours to STEM education programs.

20 - Startup Growth - October 2026

Tech Leadership The Canadian offices are not satellite sales operations. Real product gets built here. The Cloud Healthcare API, which allows healthcare organizations to organize and analyze clinical data in a scalable, compliant and privacy-sensitive way, was developed by the Cloud Healthcare and Life Sciences team in Waterloo beginning in 2017 and became widely available globally in 2020. The Safe Browsing team in Montréal protects more than five billion devices worldwide each year, issuing millions of warnings a month about phishing scams and other online threats.

Contribution to Ontario's Business Ecosystem

Innovation and Business Impact

Ontario holds Google Canada's largest concentration of people and its deepest engineering roots. The Toronto and Waterloo sites sit at either end of the

The scale of Google's contribution to Canadian

commerce has been independently measured. Research from Public First found that over the past 25 years, Google’s products and services have

helped generate over $550 billion in economic activity for Canada, driving productivity, supporting international growth, and enabling businesses and communities to grow.

Since Google began operating in Canada, services like Google Search and Workspace have unlocked an estimated $410 billion improvement in productivity for the Canadian economy. And since 2009, Google and its employees have given more than $1.3 billion CAD in funding to organizations and nonprofits in the country.

AI represents one of the greatest economic opportunities for the next 25 years, and the report estimates generative AI could boost Canada’s economy by $230 billion and save the average worker 175 hours annually. But while Canada ranks in the top 20% globally for conversational AI adoption per capita, almost 90% of current use is for personal and household tasks. To help more people bring the benefit of AI into their career Google is expanding its AI skilling commitment with two new important initiatives. Grow with Google is partnering with YMCA Canada to distribute up to 100,000 scholarships for their AI programming, and Google.org is providing over $2.7 million CAD to the Canadian Chamber of Commerce to help them deliver a new AI adoption Program to over 10,000 SMEs through their national network.

Toronto-Waterloo corridor, a roughly 100-kilometre stretch that ranks among North America's largest

technology clusters, and Google's presence there has functioned as an anchor. Waterloo EDC President and CEO Tony LaMantia has described the company as a major, collaborative anchor in the region's technology scene and a magnet for local and global talent.

Through their Google Accelerator Programs, Google

is investing in the potential of founders so that more Canadian startups can grow, scale and be successful globally. Since 2020, Google has

supported 162 startups across Canada, tackling

challenges from a wide range of industries, from healthcare to education, finance, and more. To this day, startups that have graduated from one of the Google for Startups accelerators have raised more than $1 billion CAD collectively, and contributed to the creation of 2,100 new jobs.

For years, the canonical playbook for Canadian technology startups and growth-stage founders has suffered from a predictable, near-sighted bias. The default trajectory was simple: build a domestic MVP, secure a modest seed round from a domestic VC, and look immediately south across the 49th parallel to fight for scraps in an overcrowded U.S. market. While the American market remains vital, this singlelane highway has blinded many of our most promising innovators to a seismic geopolitical and economic shift.

The epicenter of global economic gravity is moving eastward. And for Canadian founders willing to look beyond North America, a generational window of opportunity is flying wide open.

Why Canadian Startups Must Look East as Growth Forecasts Surge By Hammad Siddiqui

22 - Startup Growth - October 2026

Fresh data released this week by the World Bank underscores this reality with unmistakable clarity. According to the World Bank’s latest regional update, the economic growth forecast for East Asia and the Pacific has been revised upward to 4.5% for 2026, outperforming most advanced Western economies. Propelled primarily by a massive surge in high-tech manufacturing, robust supply chain integration, and a booming wave of artificial intelligence-related exports, regional powerhouses are experiencing a profound technological renaissance. Countries like Vietnam have seen their growth forecasts upgraded dramatically— jumping to an extraordinary 7.4%—while traditional powerhouses and innovation hubs like South Korea and Singapore continue to anchor high-value tech corridors.

For the Canadian startup ecosystem, this is not merely an interesting macroeconomic footnote. It is a clarion call.

Ima

u rt e Co

esy:

Can

Market Expansion

The Convergence of Policy and Market Reality

The October 15 Vietnam Delegation: A Timely Catalyst

The Canadian federal government has increasingly recognized this paradigm shift. Through the implementation of Canada’s Indo-Pacific Strategy—backed by multi-

Building on the overwhelming momentum of our previous missions, the Canada Startup Association is preparing to lead yet another high-impact trade delegation to Vietnam, departing on October 15.

long-term prosperity. Recent high-level bilateral talks between Canadian officials and Vietnamese leaders have further cemented this commitment, highlighting shared priorities in digital economy

digital innovation hub in its own right.

billion-dollar federal commitments—Ottawa has signaled that deepening trade, technological partnerships, and supply chain resilience in Asia is essential to Canada’s

transformation, clean technology, and regional trade frameworks like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Government-to-government agreements and diplomatic communiqués clear the

runway; they do not fly the plane. It is up to Canada’s agile, ambitious startup founders to turn these trade bridges into commercial goldmines.

At the Canada Startup Association, we have witnessed this transformation firsthand. Over the past year, our organization has led targeted startup trade delegations to South Korea, Singapore, and Vietnam. We did not take founders across the Pacific merely to

Vietnam represents the ultimate frontier of Southeast Asian dynamism. With a young, tech-savvy population, an aggressively pro-business government, and an expanding footprint in global tech supply chains, Vietnam is no longer just a manufacturing alternative; it is an emerging

Our upcoming delegation will embed Canadian founders directly into a buzzing tech ecosystem. Participants will engage with local incubators, meet enterprise conglomerates seeking SaaS solutions, and connect with regional investors who are actively looking to deploy capital into cross-border partnerships. For Canadian startups specializing in enterprise software, AI implementation, health-tech, clean technology, and fintech, this mission is designed to compress years of exploratory travel into a single, high-yield week.

hand out business cards or tour cultural landmarks. We brought them to pitch in front of regional venture capitalists, meet enterprise buyers desperate for Western software, and partner with local hardware manufacturers who are building the physical backbone of the next generation of global technology. The response from Asian markets has been positive. Southeast Asian economies are undergoing rapid digital maturation. They are leapfrogging legacy systems in fintech, agri-tech, supply-chain logistics, and AI adoption. They are not looking for charity or colonial-style market entry; they are looking for equal, innovative co-founders and technology partners who can scale solutions tailored to a combined market of billions of digitally native consumers.

Image Courtesy: Canva

23 - Startup Growth - October 2026

Market Expansion

Positioning for the Tide

A Defining Moment for Canadian Innovation

Why must Canadian startups act now? Because windows of asymmetric advantage do not stay open forever. When a region’s economic growth is

Canada has long punched above its weight class in fundamental research, artificial intelligence, and engineering talent. Yet, our commercialization metrics have historically lagged behind our inventive capacity. Part of the remedy for this perennial "commercialization gap" is

projected at 4.5%—and individual tech hubs are expanding at over 7%—local capital and domestic talent are moving at lightning speed. Global competitors

We can no longer afford to treat the global economy as a secondary consideration after the United States. The World Bank’s revised forecasts

from Europe, Japan, and the United States are already staking their claims across Singaporean innovation districts and Vietnamese tech parks. If Canadian founders hesitate, waiting for absolute certainty or relying solely on domestic venture funding rounds that have tightened considerably at home, they risk

a lack of global ambition.

prove that the future pulse of global commerce is beating strongly in East Asia and the Pacific. As our delegation packs its bags for Vietnam on October 15, the message to the broader Canadian startup community is clear: the water is warm, the currents are moving fast, and the opportunity is historic. Do not wait on the shore. Position your startup in the East, and ride the tide toward true global scale.

missing the boat entirely. To successfully ride this tide, Canadian startups must adopt three strategic mindsets: 1 - Shift from "Exporting Goods" to "CoCreating Value": Asia’s top economies are sophisticated. They do not want generic Western products forced upon them. Successful Canadian founders

Image Courtesy: Canva

approach the region with a mindset of collaboration—integrating their software with local hardware, tailoring their user experiences, and partnering with regional enterprises to solve localized challenges. 2 - Leverage the Diaspora Advantage: Canada is uniquely blessed with a rich, highly accomplished diaspora originating from South Korea, Singapore, Vietnam, and the broader Indo-Pacific. Founders should actively build advisory boards and founding teams that bridge cultural and linguistic divides. Local trust is the ultimate currency in Asian business culture. 3 - Utilize Institutional Tailwinds: Take full advantage of federal export agencies, Export Development Canada (EDC) programs, and trade association networks. Navigating foreign regulatory environments is complex; leaning on structured delegations reduces risk and accelerates time-to-market.

24 - Startup Growth - October 2026

Image Courtesy: Canva

Navigating the Enterprise AI Reality Check: On the Road to ROI By SK Uddin

Executive Objective Nearly a decade into tracking the commercialization and enterprise deployment of artificial intelligence, the corporate landscape has reached a fascinating and critical juncture. The novelty of experimentation has given way to widespread operational integration, yet boards and executive suites find themselves confronting a persistent economic paradox. This article serves as an in-depth journalistic synthesis of McKinsey & Company’s 2026 global survey report on the state of artificial intelligence. The primary objective is to unpack the core findings of the report, offering readers a rigorous, objective examination of where enterprise AI deployment truly stands today. Specifically, this piece explores the acceleration of enterprise-wide scaling, the meteoric rise of agentic AI and in-house software development, the stubborn disconnect between individual worker productivity and corporate-level financial returns, the emergence of operating costs as a gating constraint, and the actionable blueprint established by a small cohort of high-performing market leaders.

1 - Moving Beyond Experimentation: The Corporate Adoption Curve For years, corporate strategies regarding artificial intelligence were defined by isolated pilots, proof-ofconcept sandboxes, and departmental experimentation. The 2026 survey data indicates that this exploratory phase is rapidly maturing into systematic deployment. Broad Functional Penetration: Nearly nine in ten survey respondents now report regular, routine usage of artificial intelligence in at least one distinct business function within their organizations. Enterprise-Wide Scaling: The transition from isolated deployments to enterprise-scale integration has gathered momentum. Forty-four percent of respondents now report that AI is actively scaling across their entire enterprise, marking a notable climb from 38 percent in the previous year's survey.

25 - Startup Growth - October 2026

AI Adoption Multifunctional Deployment: Artificial intelligence is permeating deeper into corporate structures. The proportion of organizations utilizing AI tools across three or more distinct business functions expanded from 51 percent to 56 percent over the past year. The Enterprise Size Divide: Despite broader

Forgoing Commercial Software: Software coding agents are fundamentally altering how technology budgets are conceived and spent. Nearly one-third of respondents (32 percent) report that their organizations have actively decided against purchasing one or more commercial software products or features. Instead, technology and healthcare firms, along with professional services providers, are leveraging agentic coding tools to build customized

adoption, a structural chasm persists between large corporations and smaller enterprises. Fiftyfour percent of respondents from organizations

software solutions entirely in-house.

with annual revenues exceeding $1 billion report scaling AI across their enterprises. By contrast, only one-third of respondents from smaller organizations have reached a similar maturity

on external vendors for turnkey capabilities, leading corporate technology teams are taking ownership of their development roadmaps. They are engaging external technology partners from a position of strategic agency—

phase, highlighting how capital allocation and specialized infrastructure continue to favor

deliberately choosing where to build in-house, where to buy off-the-shelf, and where to integrate specialized external

major market players.

solutions.

Redefining Corporate Agency: Rather than passively relying

2 - The Agentic Revolution and the Shift in Tech Budgets

3 - The Great Disconnect: Individual Empowerment vs. Enterprise EBIT

Perhaps the most disruptive technological evolution highlighted in the McKinsey report is the rise of agentic AI—autonomous systems capable of executing complex, multi-step workflows across

Despite aggressive deployment curves and dramatic improvements in daily workflows, organizations continue to struggle with a profound structural disconnect: widespread individual success has failed to translate into broad, aggregate corporate financial impact.

organizational silos without constant human intervention—and its direct impact on corporate software acquisition.

The Expansion of Autonomous Agents: Larger organizations have outpaced smaller competitors in deploying agentic systems. Forty percent of respondents from large enterprises report scaling AI agents in one or more functions, up sharply from 27 percent last year. Meanwhile, adoption among smaller organizations remained flat at 22 percent. Sector-Specific Value Realization: Deployment patterns closely track where specific industries extract maximum operational value. Technology, media, and telecommunications firms heavily favor agents within IT, knowledge management, and software engineering. Consumer goods and retail organizations concentrate agentic tools in marketing and sales operations. Meanwhile, advanced manufacturers—spanning automotive, aerospace, and semiconductor sectors—deploy agents to optimize complex supply chains, inventory management, and floor-level manufacturing processes.

The Individual Productivity Boom: At the individual level, artificial intelligence is an undisputed catalyst. An overwhelming 80 percent of survey respondents report that AI tools have measurably improved their individual productivity. Furthermore, roughly half note that AI actively helps them make better professional decisions and develop new skills across diverse organizational levels. The Flat EBIT Contribution: When measured against the ultimate corporate scorecard—earnings before interest and taxes (EBIT)—the returns look remarkably stagnant. Only 37 percent of respondents report that AI has contributed positively to their organizations' overall EBIT, a figure essentially unchanged from the previous year, despite a larger share of companies scaling the technology. Functional Cost Reductions: Although aggregate enterprise-level financial metrics remain flat, organizations do report tangible financial benefits when examining specific business functions. Cost reductions are most frequently cited in supply chain management, service operations, and manufacturing.

26 - Startup Growth - October 2026

AI Adoption

Revenue Generation Hotspots: Revenue gains attributable to artificial intelligence are most commonly reported within marketing and sales functions, followed closely by product and service development and software engineering. The Human Toll on Middle Management: The benefits of AI integration are not felt equally across corporate hierarchies. While senior executives and C-suite leaders express high enthusiasm, mid-level managers and individual contributors report significantly higher rates of professional strain, anxiety, and workload pressure. Forty-seven percent of mid-level Image Courtesy: Canva

staff report experiencing negative operational or emotional side effects from AI rollouts, compared with only 31 percent of executives.

4 - Gating Constraints: Operating Costs and Workforce Realities As corporations push deeper into enterprise-wide integration, they are encountering hard economic and human realities that require careful calibration. The Rise of Operating Costs: For the first time, underlying operational expenses are emerging as a notable friction point. About 20 percent of respondents report that AI-related operating costs—including heavy token consumption, cloud infrastructure upkeep, and specialized computational expenses—are actively constraining their deployment velocity. Nevertheless, the vast majority of organizations intend to increase their overall AI capital expenditures in the coming year. Shifting Employment Expectations: Corporate sentiment regarding total head count continues to evolve. Thirty-nine percent of respondents anticipate AI-related declines in their organizations' total employment over the coming year, up from 32 percent in 2025. Interestingly, historical data shows that actual workforce reductions realized over past years have consistently fallen well short of executive expectations, suggesting a more complex substitution curve than initially feared. The Blueprint of High Performers: A small elite group of organizations— representing roughly 6 percent of all survey respondents—succeeds in capturing significant, measurable financial value from artificial intelligence (attributing at least 5 percent of total EBIT to AI deployments). These high performers share distinct operational characteristics: They pursue aggressive growth and business innovation alongside mere cost-efficiency.

Conclusion: The Path Forward for Business Leaders McKinsey’s 2026 global survey offers a sobering yet optimistic roadmap for Canadian and global enterprises. The era of casual experimentation has passed, replaced by an environment where agentic systems, in-house software development, and deep operational scaling are reshaping industries. However, technology alone cannot bridge the gap between individual productivity and enterprise-level profitability. To move past the current economic plateau, business leaders must treat operating costs as a core design constraint, harness the growing AI fluency of their workforces, and commit to the structural workflow redesigns necessary to turn technological capability into enduring commercial value.

They refuse to simply paste AI tools onto legacy workflows; instead, they fundamentally redesign end-to-end business processes from the ground up to harness native AI capabilities. They back technological investments with rigorous leadership commitment, cultural change management, and disciplined operational governance.

Reference: This comprehensive analysis is built upon the findings of the latest global research report, "The State of AI in 2026: On the Road to ROI," published by McKinsey & Company’s QuantumBlack division.

Image Courtesy: Melissa Houston

The Future Of Venture Capital Depends On Who Controls The Capital By Melissa Houston, CPA, CEPA, Founder of The Sellable Firm

For years, the conversation around women and venture capital has centered on one statistic: women founders receive less than 2% of venture capital funding. But that statistic tells only half the story. The bigger question isn't who receives capital. It's who controls it. A growing number of women are launching venture capital funds, becoming angel investors and educating the next generation of investors. Rather than waiting for greater access to the traditional venture capital ecosystem, they're creating a new one; one that could fundamentally change who gets funded and which innovations reach the market.

28 - Startup Growth - October 2026

Venture Capital & Women

Changing Who Writes the Checks

Education Is the Missing Link

Venture capital doesn't just finance businesses. It determines which ideas grow into companies and which entrepreneurs have the opportunity to scale.

Gray believes one of the biggest obstacles isn't access to capital - it's access to knowledge.

According to Catherine Gray, founder of She Angel Investors and executive producer of Show Her the Money, changing the future of entrepreneurship starts by changing who makes investment decisions.

"So many women don't know what venture capital is," she said. "They've never been taught that it's even an option."

"It's not enough to simply help more women pitch investors," Gray told me. "We must have women investors at the table."

documentary designed to make venture capital more accessible through

Her perspective is supported by research showing that as more women become venture capital decision-makers, female founders gain greater access to investment capital. The people writing the checks influence which businesses receive funding. Gray points to innovations like the redesigned medical speculum developed by gynecologist Dr. Annie Munez as an example of why representation among investors matters.

"Women identify with women," she said, noting that investors are naturally drawn to problems they understand personally.

Building A New Venture Capital Ecosystem Rather than waiting for the traditional venture capital industry to become more inclusive, Gray believes women

That belief inspired Show Her the Money, a

storytelling. She's also launching the VC 101 College Experience that combines the movie with an online course and case study videos. This program teaches students about venture capital as a career path, and a funding and investment path.

An entity called Girls into VC introduces young women to venture. They did the

beta trials for the VC 101 course that officially launches in the fall semester at Babson College before expanding into schools across the country. The goal isn't simply to create more women founders. It's to create more women allocating capital.

are building something entirely new.

"We are absolutely building our own venture capital system," she said. "The old boys won't let us in, and we don't even want to be part of their system because their system is not great." She points to trailblazers including Julie Castro Abrams of How Women Invest, Nikkie Kent of Red Clover Fund, and Lorine Pendleton of 125 Ventures, along with more than 300 women-founded venture funds operating across North America. While progress remains gradual, women continue to represent a growing share of venture capital decisionmakers, creating more opportunities for diverse founders and ideas to receive funding.

29 - Startup Growth - October 2026

Venture Capital & Women

Funding Growth, Not Just Ideas Gray also believes founders need to think differently about capital.

Author - Melissa Houston

While grants and pitch competitions can provide valuable exposure, they're rarely enough to build a venture-scale company. "The good thing about pitch fests is there are usually investors in the audience who can invest directly in your company," Gray said. "That can be far more valuable than the grant itself."

Melissa Houston, CPA, CEPA, is the

Instead of focusing solely on prize money, founders should view these events as

opportunities to build relationships with investors who can support future rounds of financing. She also points to firms like SoGal Ventures, whose commitment to meaningful investment

founder of The Sellable Firm, where she helps founder-led businesses build more valuable, transferable, and profitable companies. With more than 25 years of experience in finance and accounting, she specializes in helping business owners increase enterprise value through stronger financial performance, reduced owner dependence, improved operational efficiency, and long-term strategic planning.

and follow-on funding gives founders the runway to scale rather than simply survive.

Melissa is a Certified Exit Planning

As Gray put it: "Women have to think bigger."

bestselling book Cash Confident: An

Advisor (CEPA), a Forbes contributor, the author of the international Entrepreneur's Guide to Creating a Profitable Business, and the host of The Sellable Firm Podcast, where she

The Bottom Line

shares practical strategies for

The future of venture capital isn't just about

lasting wealth and future options.

helping more women raise money; it's about helping more women control it. As more women become investors, fund managers and capital allocators, they'll have greater influence over which companies receive funding and which ideas shape the future of innovation. Changing who writes the venture capital checks may prove to be the most powerful way to change entrepreneurship itself.

building businesses that create

Learn more, explore additional resources, and listen to the podcast at TheSellableFirm.com. The opinions expressed in this article are those of the author and are intended for informational purposes only. They should not be considered accounting, tax, legal, or financial advice. Readers should consult qualified professionals regarding their specific circumstances.

30 - Startup Growth - October 2026

A Founder’s Guide to Canadian Innovation Funding in 2026 By Tehmina A Chaudhry Canadian founders rarely fund a company with a single perfect cheque. A startup can begin with founder savings and customer revenue, then use a government program to

Canada offers support through federal, provincial, and territorial initiatives, regional development

hiring and growth, and use repayable financing for equipment, market expansion, or working capital.

co-investment vehicles, banks, angel investors, and venture

fund technical development, claim an R&D tax credit once eligible work is done, raise angel or venture capital for

agencies, tax incentives, government procurement, public

That combination is known as a capital stack: a systematic succession of funding sources tailored to the company's

capital funds. The best approach is not to chase every available program. It is to build a financing

business now, what it can unlock next, and how to avoid

demand, commercializing,

stage, risk level, and upcoming milestone. For entrepreneurs in 2026, the challenge is more than securing money. It means assessing what kind of financing fits the spending expensive equity on activities that grants, tax incentives, or other non-dilutive financing could support.

Image Courtesy: Canva

strategy around specific outcomes such as proving the technology, validating customer expanding, and eventually scaling.

Startup Funding

Start With the Milestone Before seeking funding, founders should identify the next step that will increase the company's value or reduce its risk. It could be a functional prototype, a paid pilot, intellectual property protection, regulatory approval, a first customer, recurring revenue, clinical data, or entry into a new market. A weak funding application says, “We need money to grow.” A strong one describes exactly

what the money will do, how long it will take, what the company will contribute, and what measurable outcomes will follow.

For example, a pre-revenue cleantech company would

need cash to test a prototype with a customer. A healthtech company may need clinical validation, cybersecurity, and regulatory preparation. A SaaS company with recurring revenue may need sales staff, product infrastructure, and market development. Each scenario

calls for a different capital stack. The first rule is straightforward: allocate cash to milestones rather than merely to expenses.

Stage One: Pre-Revenue and Early Validation Founders should try to preserve equity from the start. At this stage, the company may have an idea, preliminary research, a prototype, or a small group of potential customers, but not yet predictable revenue or a

venture-ready growth strategy. Founder cash, friends and family, early customer deposits, incubators, business-plan competitions, and angel investment can all help. Futurpreneur's Core Startup Program, open to Canadian entrepreneurs aged 18 to 39, can provide up to $75,000 in financing, along with mentorship and business-planning support. Innovation-focused startups may also consider the National Research Council of Canada's Industrial Research Assistance Program (NRC IRAP), which provides advisory services and financial assistance to eligible small and medium-sized Canadian enterprises engaged in technological innovation. At this stage, the goal is not to raise the largest possible amount. It is to generate evidence: a prototype, validated technical claims, pilot customers, early revenue, a credible team, and a clear path to the next stage. That proof strengthens later grant, loan, and equity applications.

Stage Two: Research and Development Grants and tax credits can help R&D-intensive companies cut the cost of innovation without requiring founders to give up ownership. The main federal tax program is Scientific Research and Experimental Development (SR&ED), which offers tax incentives for qualifying R&D work done in Canada. SR&ED is especially important for companies developing new software capabilities, hardware, scientific innovations,

manufacturing processes, clean technologies, and life-sciences products. However, it is not an upfront payment for expenses. Founders must

keep detailed records of technical uncertainties, experiments, personnel hours, contractor work, materials, and project outcomes. Eligibility depends on the work performed and the company's tax status.

One workable approach is to use a qualified grant or IRAP contribution to fund part of a defined innovation project, use founder or

investor cash to cover costs the program does not, and treat SR&ED as a post-expenditure

recovery tool. Founders should also read each program's terms carefully. Some grants require matching funds, limit eligible expenses, or affect how project costs are treated for tax purposes. Planning with a qualified accountant and financial adviser can help avoid unpleasant surprises.

Image Courtesy: Canva

Startup Funding

Stage Three: Commercialization and First Scale When a company has a product, customer traction, and a credible path to growth, repayable financing can be more useful. Canada's regional development agencies (RDAs) offer programs that help firms commercialize innovations, raise productivity, expand, and compete globally. The Regional Economic Growth through Innovation program helps high-growth companies scale new products, services, or technologies. Its business

scale-up stream provides interest-free, repayable funding to incorporated firms. The delivery agency and local priorities differ by region, so founders should contact their RDA early rather than waiting until a project is fully designed. Repayable public financing can be appealing because it typically avoids dilution. However,

founders should examine repayment terms, reporting requirements, cash-flow impact, and

whether the funds are better suited to revenuegenerating expansion than to high-risk research. The Strategic Innovation Fund, on the largeproject end of the range, supports substantial

innovation projects. Its minimum commitment is typically $10 million for projects with a total value of at least $20 million, making it more relevant to

established scale-ups, major manufacturers, large collaborations, and transformative initiatives than to very early startups.

Stage Four: Private Capital and Co-Investment Private capital is typically the best tool for a company seeking speed, market access, executive hiring, aggressive customer acquisition, or largescale international expansion. Angel investors can provide seed funding and guidance; venture capitalists can fund high-growth companies with high-return potential; and strategic investors can supply industry expertise, customers, and distribution channels. Equity is expensive only when it is used prematurely or without a defined plan for creating value. A founder should seek venture financing when it can help advance a real opportunity rather than merely extend the runway. 33 - Startup Growth - October 2026

Public programs can make private investment go further. A grant may reduce technical risk before a seed round. SR&ED may help sustain product innovation after a round closes. Regional repayable funding can finance equipment or expansion that would otherwise be paid for with equity. The key is timing. Founders should not expect public financing to replace investor capital, especially when a program demands co-funding, repayment, or proof of available funds.

A Practical Capital Stack A Canadian startup's funding sequence might look like this. Begin with founder savings, early customer validation, incubator support, and a small angel investment. Add IRAP or another innovation program

for specific technical development, and claim eligible SR&ED credits to recover part of qualifying Canadian R&D costs. Then raise seed funding to build the team, launch commercially, and create repeatable revenue, supported by regional development funding for

productivity, equipment, commercialization, or growth. Later, venture money, strategic investment, or larger government projects can support national and global scale. This sequence is only an example. A bootstrapped services company may never need venture financing. A biotech startup may need specialist venture investment much earlier. A

manufacturer may rely more on equipment financing

and repayable contributions. The general principle is to use the cheapest appropriate capital first while making sure the company has enough cash to execute.

The Bottom Line Canadian innovation financing is not a single marketplace but a network of programs, incentives, lenders, investors, and regional partners. Founders who build a capital stack can fund expansion more deliberately, retain ownership for longer, and make sure each source of funding unlocks the next. The winning question is not “Which grant can we get?” It is “What milestone will make our company fundable at the next level?” When founders answer that clearly, they can combine public and private resources into a funding strategy that supports both innovation and long-term success.

Image Courtesy: Canva

Building Canada’s Next Competitive Layer Through AI Infrastructure By Hammad Siddiqui For Canadian startups, artificial intelligence infrastructure is no longer limited to faster processors or bigger data centres. It now includes affordable compute, high-quality data, skilled labour, secure cloud environments, commercialization support, industry partners, and practical pathways for responsible AI deployment in real-world organizations. A company can build an outstanding AI model and still struggle to compete if it cannot afford to train and run it, acquire relevant data, hire technical talent, meet privacy and security standards, or find customers ready to test the product. In that sense, AI infrastructure is startup infrastructure.

Canada is responding with a growing range of public programs. The government's Regional Artificial Intelligence Initiative, or RAII, aims to help startups and small and medium-sized businesses commercialize AI innovations and accelerate adoption in key sectors. The national AI strategy also includes efforts to expand access to sovereign computing and promote commercialization through Canada's AI institutes. Meanwhile, Scale AI continues to support industry-led applied-AI projects that connect technology providers with business users. For founders, the opportunity goes beyond applying for funding. The goal is to build a company around the entire AI infrastructure stack, including compute, data, product, governance, customers, and capital.

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AI Infrastructure

AI Infrastructure Is More Than Compute Compute is vital. Training, fine-tuning, testing, and deploying modern AI systems can be costly, particularly for companies building foundation models, complex computer vision systems, health-care applications, industrial AI products, or data-intensive automation tools. But compute alone does not produce a scalable AI business. Founders also need trustworthy data, secure storage, model-building tools, cybersecurity controls, monitoring systems, legal advice, customer feedback, and subject-matter expertise. For example, an AI company developing predictive-

Co-Funding Is Part of the Strategy Founders should recognize that AI support

programs often require a realistic financial plan that goes beyond government funding. In the Prairie provinces, RAII funding can range from $250,000 to $5 million per project, covering up to 50 per cent of eligible costs. Applicants must confirm that the remainder comes from non-government sources.

maintenance software for manufacturers may need industrial data, partnerships with equipment operators, secure integrations with operational systems, technical staff with

This requirement is more than a hurdle. It

The infrastructure challenge is not just whether a startup can

applications typically combine several elements:

machine learning expertise, and customers willing to test the solution in a live facility. The same goes for health care, agriculture, transportation, cleantech, and financial services. build an AI solution. It is whether the product can be trusted, integrated, marketed, maintained, and scaled in a real Canadian sector.

follows the logic of co-investment: public money is meant to reduce risk and speed up a project that already has private backing, customer demand, business cash, or outside investment. For startups, the strongest

A commercially viable AI use case. Clear technical readiness and a realistic delivery plan. A customer, pilot partner, or industry

The federal Regional Artificial Intelligence Initiative is a pilot

program under Canada's National Artificial Intelligence Strategy. It is administered by Canada's regional development agencies and will run until March 31, 2031. RAII supports two broad areas. The first is AI productization and commercialization: helping startups and emerging companies demonstrate, develop, and bring AI innovations to market. The second is helping small and medium-sized firms integrate AI into their operations, particularly in priority sectors. Eligible projects include AI demonstrations, commercialization activities, product development, technology integration, ecosystem support, and initiatives that build business capability for AI adoption. For small and medium-sized businesses, the program can provide interest-free repayable financial assistance of up to 50 per cent of eligible project costs. The program's regional structure is crucial. A healthtech company in Atlantic Canada, an agtech startup in Saskatchewan, and a clean-tech firm in British Columbia may all have different customers, industry requirements, and local support organizations. Regional agencies can help match national AI policy with local economic strengths.

source. Measurable outcomes such as increased productivity, revenue, employment, technology commercialization, and industry adoption.

A founder should first develop a commercial case and view RAII as an accelerator, not an entire financing strategy.

Image Courtesy: Canva

The Regional AI Initiative

adopter. Funding from company revenue, investors, or another non-government

AI Infrastructure

Compute Access and AI Sovereignty The cost and availability of AI compute are becoming a critical issue in Canada. The federal AI Compute Access Fund was created to address high compute prices and limited domestic capacity, with up to $300 million set aside to support access to computing resources. Its stated

purpose is to help Canadian businesses afford the computing power needed to develop and deploy AI. The first intake is now closed. Canada has also advanced its Sovereign AI Compute Infrastructure Program, which could provide up to $890 million over seven fiscal years beginning in 2026-27 to develop, build, and operate domestic compute systems. For startups, sovereign computing does not mean every company must use a government-built data centre. It

means Canada aims to ensure domestic firms have dependable, secure computing capacity, especially where data sensitivity, supply limits, pricing, and national competitiveness are concerns. Founders should watch for

future compute-access opportunities while managing costs now. That includes choosing the right models, minimizing

unnecessary training runs, using efficient inference systems, tracking cloud spending, and adopting a technology architecture that matches the business problem.

Responsible Adoption Is a Growth Issue As AI becomes more widely used, responsible deployment is becoming an important part of business readiness. Customers increasingly ask companies to explain how they handle privacy, cybersecurity, data quality, bias,

model performance, and human oversight. In regulated industries, this matters even more. A health-care AI startup must address patient data, clinical safety, and evidence requirements. A financial-services product must account for fraud, explainability, and risk management. An industrial AI platform must protect both operational technology and sensitive production data.

Responsible AI should not be treated as postlaunch paperwork. Build it into the product's

infrastructure from the start: clear data rights, secure integrations, testing methods, audit logs, model monitoring, and a strategy for responding when systems fail or produce

questionable results. Trust helps companies close pilots, win enterprise customers, and scale.

Scale AI and Industry Collaboration Scale AI is Canada's AI Global Innovation Cluster. It serves a different purpose than a typical startup support program. It funds applied AI projects that bring together businesses, technology providers, researchers, and industry partners to solve commercial problems and speed adoption. In late 2025, Scale AI announced about $128.5 million in funding for 44 applied-AI projects across Canada. The organization said the projects aim to boost Canadian competitiveness through practical AI implementation across industries. A consortium-based project can benefit an AI company by providing access to real adopters. Rather than building in isolation, the startup can collaborate with an industry partner who has data, operational requirements, customers, facilities, and a real-world deployment environment. This is especially true in logistics, manufacturing, agriculture, retail, health care, transportation, and supply-chain technology. The most powerful AI products are rarely those with the most impressive demos. They are the products that add measurable value to a customer's workflows. 36 - Startup Growth - October 2026

The Bottom Line Canada's next competitive AI layer will be built on more than compute. It will be built through a network of affordable compute, responsible data use, commercialization support, regional partners, industry customers, and coinvestment funds. RAII, the AI Compute Access Fund, sovereigncompute investments, and Scale AI can all help Canadian companies move from technical concepts to real-world deployments. But entrepreneurs must still solve the hard commercial problem: building AI that customers can afford, trust, integrate, and measure. Companies that treat AI infrastructure as a complete business system, not just a model, are the most likely to win.

Image Courtesy: Charles Lammam

Champagne's fall budget should refrain from adding more Last month, Ottawa wrapped up its prebudget consultations, with the fall budget soon to follow. I’m guessing the consultations yielded many asks aimed at Canada’s innovation economy—a new startup fund, a new venture envelope, a new program to back whatever sector is hot this year, and on and on. Finance Minister Champagne should resist the temptation and turn down these requests.

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That’s not to diminish the importance of startups and scale-ups. These firms matter a great deal; they turn new ideas into jobs, push productivity up, and if successful, go toe-to-toe with competitors abroad. Canada doesn’t have enough of them, and we’re losing ground fast. We’re starting fewer new companies these days, and the ones that do launch and succeed often leave anyway. They sell to an American buyer, or move south outright, because that’s where the networks, growth, and exits are.

Innovation Policy You’d think a problem like that means Canada needs more support for startups and scale-ups. It doesn’t. Our country has plenty of programs already. As this DeepDive will argue, what we lack is any way for a founder to make sense of them, the confidence that the ones we already have are built to work, and robust evidence that any of this spending is closing the business innovation gap with our peers.

In effect, Canada’s policy system rewards founders who are good at chasing government money or lobbying for more, not founders who are good at growing companies.

Too many programs, not enough coordination

Ottawa already knows this

The federal government alone runs 166 programs meant to help firms innovate or grow. The sheer number is indeed eyepopping. A recent OECD review of Canada’s industrial policy

Admittedly, this fragmentation problem isn’t a new insight—the government itself knows this. Back in 2011, a federal

other G7 countries. In the OECD’s own words, Canada “stands out for its relatively fragmented system.”

recommended pulling their delivery under one new agency, which would run a national “concierge” service to

found that Canada delivers these business supports through 12 separate government bodies, compared with three to six in most

But fragmented doesn’t mean evenly spread. Federal institutions provide 85 percent of all funding to small and medium-sized enterprises and young firms, and one of them, the Business

expert panel chaired by Tom Jenkins reviewed 60 innovation programs and

help firms find and access the support they qualify for.

Development Bank of Canada (BDC), accounts for 62 percent of

In 2017, the government’s own Advisory

attention, but rather one dominant lender surrounded by several small, confusing programs that barely move the needle.

finance minister to review and rationalize innovation programs, and only scale up the ones that actually

that on its own. Nowhere is this clearer than in venture capital, where BDC has grown into the largest investor in the country. This isn’t really a dozen equal players competing for a founder’s

Ask any founder who’s tried to figure out whether they qualify for

something offered by the Business Development Bank, Export Development Canada, or the Scientific Research and Experimental Development (SR&ED) tax credit, and they’ll tell you the same thing: it’s too complicated. The provinces then pile on top of that. Ontario alone runs dozens of programs through agencies like Invest Ontario and MaRS. This year, it added a $4 billion fund for certain sectors, in addition to an $8 billion infrastructure fund already in place. Whether this money reaches the startups and scale-ups that need capital, as opposed to large established players, is genuinely unclear. Navigating this system costs real time and money, and the burden falls hardest on the companies Canada can least afford to lose. Every hour a founder spends filling out a grant application, tracking eligibility rules, or paying a consultant to navigate the SR&ED tax credit is an hour not spent building the product or landing the next customer.

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Council on Economic Growth, chaired by Dominic Barton (recently named chair of Invest in Canada), told the

work. Unfortunately, Ottawa then added new programs and skipped the part about rationalizing the survival of the old ones.

Outside researchers have come to the same conclusion. A 2025 University of Toronto working paper by Iain Stewart, former head of the National Research Council, found that entrepreneurs describe the programs as “bureaucratic and unresponsive” and called for a single business innovation delivery agency. A 2024 discussion paper prepared for Independent Senator Colin Deacon found many programs go undersubscribed, not because businesses don’t need help, but because the programs weren’t built around what applicants can actually navigate.

Innovation Policy Back in 2022, the federal budget promised a Canada Innovation Corporation to put program delivery under one roof. That was delayed, with the timeline pushed to 20262027. I don’t know where it’s at now. What I do know is that this year’s spring economic update promised yet another review of organizations involved in federal business financing—itself an admission that Ottawa is aware the system isn’t working.

Even the programs we have are built wrong It’s not just that there are too many programs pulling founders in different directions. Some of the ones we already have are built the wrong way.

Take Canada’s flagship R&D support program, the SR&ED tax credit. Canada leans almost entirely on tax

credits to support business R&D rather than direct grants. Budget 2025 helped by raising the ceiling on the enhanced, refundable SR&ED credit from $3 million to $6 million in qualifying expenses, worth up to $2.1 million a year, and for the first time extended that refundable rate to certain eligible Canadian public corporations.

But plenty of growth firms still fall outside of eligibility. A company that keeps reinvesting heavily in R&D often runs at a loss or close to it. A non-refundable credit isn’t worth much to a firm in that position: it only reduces tax owing, and there’s often little or no tax owing to reduce. The firms most likely to be scaling fast and spending the most on R&D are frequently the ones the program helps least.

The paperwork doesn’t help either. Preparing an SR&ED claim often eats up a meaningful chunk of the credit itself in consulting fees (12.5 percent of claims according to one estimate), something the federal government has acknowledged. Starting April 1, 2026, the CRA rolled out an elective pre-claim approval process that cuts review time from 180 days to 90, along with more use of AI to speed up claims processing. These are useful fixes, but they’re patches on a program whose basic design still shortchanges the companies it’s supposed to help most.

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Innovation Policy Similar design problems show up on the venture capital side. Budget 2025 committed $1 billion to the Growth Venture Capital Catalyst Initiative (VCCI), a fund meant to draw more

private money into Canadian startups by investing alongside private fund managers. But that kind of vehicle has a limited track record of working, and it needs to be built with actual commercial discipline from the start: private managers making the investment calls, a genuine profit motive (as opposed to political considerations), and a clear point at which government money steps back and lets private capital take over, the way Israel structured its Yozma fund in the 1990s. Success is when programs don’t crowd out private venture capital and when the system becomes self-

sustaining. Otherwise, it invites calls from industry associations coming back to government over and over with their hands out.

The latest VCCI round isn’t Ottawa’s first run at this idea. A similar fund launched

back in 2013 under a different name, got topped up again in 2017 and 2021, and has now returned in 2025 larger than ever. More than a decade of these

rounds in, Canadian venture capital still hasn’t managed to stand on its own without public money propping it up. Each new version has mostly repeated the last one, rather than asking why the earlier rounds didn’t get the job done. Skip that reckoning again and this fund risks becoming just another program founders have to pitch to, instead of something that actually pulls sustained private money in behind it. A direct consequence of government repeatedly doling out funds is that it creates an unproductive market of rent seekers. Ecosystem players focus on securing public money instead of building and growing world beating firms.

40 - Startup Growth - October 2026

Consider the fight among industry associations over the $750 million Ottawa set aside in last year’s budget for what it called “early growth-stage funding gaps” (this is on top of the $1 billion VCCI noted earlier). The Canadian Venture Capital and Private Equity Association wants the money aimed at bigger, laterstage deals, warning that Canadian scale-ups can’t find growth capital at home and end up getting bought by American firms instead. The National Angel Capital Organization wants the same money aimed at the earliest-stage startups, arguing that’s where the real gap sits.

When two respected voices in the innovation community end up in a public tug-of-war over a single pot of government money, that tells you the system is generating rent seekers instead of

actual outcomes. Add more pots of money and you get more of these fights, while the companies both sides claim to be helping keep heading to the US.

More money, same results Before reaching for a 167th program, we should ask: with all the past spending, is Canada producing materially more innovation, or is it falling further behind?

Signal49 Research’s 2024 Innovation Report Card benchmarked Canada against 19 peer countries across 21 indicators of

innovation performance, covering everything from R&D spending to patents to technology adoption. Canada ranked 15th and earned a C grade. Finishing in the bottom third on the very thing that drives long-term prosperity, for a country with our resources and educated population, is worth taking seriously.

The Council of Canadian Academies’ 2025 assessment reached the same conclusion. Its expert panel put it bluntly: Canada is “an innovation laggard on multiple fronts.” Canada had the second-lowest labour productivity in the G7 in 2023, and its per capita GDP grew just 5.1 percent between 2013 and 2023—the slowest pace in the G7, and far behind the roughly 20 percent gain in the U.S. over the same decade. These are symptoms of the same underlying weakness. Business R&D spending is just one slice of this picture, but it’s a slice directly tied to the programs discussed, since encouraging this type of investment is what many of them are built to do. On this narrower measure, Canada still lands near the bottom. Out of 35 OECD countries, Canada ranks 21st on business R&D as a share of GDP at 1.1 percent, which is a little over half the OECD average of 2.0 percent and a fraction of leaders like Israel (6.3 percent) and South Korea (4.2 percent).

Innovation Policy More programs and more dollars haven’t closed that gap. They haven’t even slowed it down. Whatever Canada’s innovation problem actually is, it isn’t a shortage of government money.

It wasn’t always this lopsided. In

2000, Canadian businesses spent 1.1 percent of GDP on R&D, or nearly three quarters the OECD average of 1.5 percent. Since then, the OECD average has climbed steadily to 2.0 percent, while Canada has effectively flatlined, drifting in a narrow band between 0.9 and 1.2 percent for a quarter century. The two lines that started less than half a point apart in 2000 now sit nearly a full point apart. Other countries kept investing in their businesses. Canada largely stood still.

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Innovation Policy

The pattern continues To date, none of this has stopped Ottawa from launching more, and increasingly dubious programs. I call this pattern “policy adventurism,” when governments reach for flashy unproven initiatives instead of proven fixes that already exist (more on this later). The clearest recent adventure arrived in June 2026, when Ottawa released its National AI Strategy. Buried inside it was a brand new $500 million Canadian Tech Growth Fund, which lets the federal government take equity stakes in promising AI firms, plus a $700 million top-up to the existing Compute Access Fund. It

was new money and a new vehicle, launched the same year the federal government promised to

fold program delivery under a single agency (the Canada Innovation Corporation)—a promise that remains unfulfilled, four years after they made it. The penchant for adding more and not stopping to evaluate what’s already in place seems neverending. And it only further complicates the underlying maze for a founder to navigate.

Third, coordinate with provincial governments to avoid destructive subsidy competition and duplicative confusion. The bigger lesson here is one Canada keeps missing. The countries that have built strong pipelines of scaleups in recent decades didn’t do it by stacking up programs. Estonia, Singapore, and Ireland all made their tax systems more competitive, cut red tape, and opened up competition. Narrow programs can be used to close specific gaps and, where possible, they should structure eligibility around firm age as opposed to firm size. Canada has been doing this backwards for years: layering targeted programs on top of a tax and

regulatory system that still discourages companies from growing. A firm facing a punitive tax structure and heavy red tape isn’t going to be saved by the 167th support program.

Ottawa has spent decades promising to fix program complexity while delivering more of the same problem, as the founders Canada needs most keep looking south. The fall budget must break that cycle.

What the fall budget should actually do So, what should the fall budget actually do? First, build a single website where a startup or scale-up can see every federal and provincial program it might qualify for, sorted by stage and sector, with one application instead of a dozen. Second, put every one of these programs through a robust review every five years, with a third-party entity required to show, with evidence, that the program actually works. Programs that don’t should be folded into ones that work, or cut outright, with the money redirected to tax reforms that help every growth firm rather than the lucky few who successfully navigated the application process.

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Canada's startups have plenty of ideas, technological expertise, and founders eager to launch ambitious businesses. What they frequently lack is sufficient patient capital to progress from early traction to national and global scale. This gap is particularly obvious when a company requires larger fundraising rounds, longer development timetables, or specialized investors, which are typical in industries such as medical sciences, clean technology, Image Courtesy: Canva

sophisticated manufacturing, and artificial intelligence. The federal government is framing its

Can Canada’s New Growth VCCI Unlock More Scale-Up Funding?

upcoming Venture and Growth Capital Catalyst Initiative, often known as Growth VCCI, as part of the solution. The program, announced in Budget 2025, will offer $1 billion in cash beginning in fiscal year 2026-27. It plans to participate alongside

private-sector investors through three channels: funds of funds, life sciencesfocused venture funds, and emerging venture fund managers. Growth VCCI is not a grant program, and it will not issue checks directly to startups. Instead, it aims to boost venture capital funds that invest in Canadian enterprises. Whether that indirect strategy will close Canada's scale-up funding gap will depend on how well the program attracts institutional capital, supports specialist investors, and reaches startups outside the country's most established venture hubs.

By Tehmina A Chaudhry

43 - Startup Growth - October 2026

Growth-Stage Finance

A Program Built Around Funds Growth VCCI is established as a market development initiative. The Government of Canada will invest alongside private investors in venture capital funds and funds-of-funds, with the Business Development Bank of Canada, or BDC, managing the investments on behalf of the federal government. This is an

According to the federal government, the initiative aims to help create a more vibrant and sustainable Canadian venture capital industry, improve access to capital for innovative firms, and promote the development of Canadian anchor companies— large, long-term businesses that generate jobs, intellectual

Image Courtesy: Canva

important distinction. A founder cannot use a Growth VCCI application to fund wages, product development, clinical trials, or expansion. The goal is to gradually enhance the amount and quality of funding available in the venture ecosystem. If the program is successful, additional fund managers should be able to support Canadian firms from the seed stage through larger growth stages.

property, supplier networks, and future startup founders.

Stream One: Mobilizing Institutional Capital The first Growth VCCI stream focuses on funds of funds, with the specific purpose of attracting more private venture capital from pension funds and other institutional investors. Funds of funds invest in numerous venture capital funds rather than directly in

entrepreneurs. This structure can distribute risk across managers, industries, locations, and firm portfolios. For pension funds and other institutional investors, it may provide a more realistic entry point into venture investing than selecting individual startup deals or even a single VC manager.

This could have significant implications for Canada. Long time horizons, specialized knowledge, and a willingness to accept risk are all required for venture investing. Institutional investors oversee vast pools of capital, but not all have historically invested much in domestic venture funds. If Growth VCCI can promote greater private institutional participation, the government's $1 billion pledge may have a multiplier effect rather than serving as a stand-alone public pool of funds. For entrepreneurs, the question is simple: will it produce more Canadian-led funds that can participate in larger follow-on rounds?

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Stream Two: A Life-Sciences Focus The second stream will focus on

venture fund managers who support Canadian life sciences firms. This is a strategically critical decision since

funding challenges for life-science businesses differ from those faced by many software startups. A software

firm may quickly evaluate demand, generate early revenue, and iterate on its product within months. A biotech, medtech, pharmaceuticals, diagnostics, or clinical-stage startup may need years of research, laboratory work, regulatory planning, intellectual property protection, clinical validation, and specialized manufacturing before it can generate considerable commercial revenue. These startups require investors who understand scientific, clinical, regulatory, and commercialization risks. They also require funding available across multiple milestones, rather than evaporating after a first seed round.

Growth-Stage Finance A dedicated life-sciences stream could help to expand Canada's pool of specialized investors. However, the impact will be determined by fund selection, fund size, and private co-investors' willingness to support enterprises through later, more capitalintensive stages. For health and biotech founders, this approach may be most effective when it enables Canadian funders to lead or make significant contributions to larger rounds.

Finally, companies should not wait for Growth VCCI to begin operating before building relationships with investors. Founders should target funds whose mandates match their stage and sector, prepare a clear data room, define their capital milestones, and build a funding strategy that combines venture capital with other Canadian support as needed.

Stream Three: Emerging Managers and New Hubs The third stream will help developing fund managers, particularly those who invest in strategic industries and are headquartered

outside of Canada's conventional venture capital hubs. This is an essential ecological signal. Toronto, Montréal, and Vancouver remain important hubs for Canadian startup investment, but there are strong founders and technical research groups

throughout the country. Emerging managers can provide local knowledge, sector expertise, and access to founder networks that larger generalist funds may ignore. Supporting newer fund managers also has a diversity and market growth component. When entrepreneurs have access to a variety of investors, investment theses, check sizes, and sector

competencies, the venture ecosystem becomes more robust. More managers may lead to increased competition for transactions, improved founder access, and more cash reaching

companies that may not fit traditional venture patterns. The problem is to ensure that emerging managers receive more than just symbolic assistance. Building a fund platform necessitates institutional support, disciplined investment, operational capabilities, and the ability to develop a track record.

What Founders Should Watch As the program develops, Canadian founders should watch four practical indicators. First, watch who is selected as fund managers. The names, sector expertise, geographic focus, and investment stages of the participating funds will show where the new capital is most likely to go. Second, see whether the initiative draws significant private-sector matching funds. Growth VCCI's value will be measured not just by the federal contribution but by the additional institutional and private capital mobilized as a result. Third, look for signs of increased follow-on funding. Seed capital helps, but the true scale-up test comes when companies need larger rounds to hire, enter new markets, manufacture regulated products, complete trials, or compete with betterfunded foreign rivals.

The Bottom Line Growth VCCI is a long-term ecosystem intervention, not a short-term financial

fix. Its $1-billion investment, beginning in 2026-27, has the potential to strengthen Canadian venture capital if it attracts more pension and institutional investors, builds specialized life-sciences capacity, and supports credible emerging managers across the country. For founders, the opportunity is indirect but potentially significant. A stronger domestic venture capital market may give more Canadian companies the

capital they need to stay independent longer, scale at home, and grow into the anchor companies Canada needs.

Your engagement helps strengthen a growing ecosystem of founders, builders, and business leaders. Startup Growth is designed to deliver practical insights, emerging trends, and realworld strategies that support entrepreneurial success. Click here to subscribe and follow our official channel. Stay connected to us for the latest developments in the startup landscape. Your continued support helps us spotlight innovation and opportunity across Canada. Disclaimer: The content published on StartupGrowth.ca is based on publicly available sources and is provided for general informational purposes only. Startup Growth does not endorse, recommend, or guarantee any products, services, organizations, or claims mentioned. Readers are encouraged to conduct independent research and exercise due diligence before making financial, investment, or business decisions.

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Image Courtesy: Faizan Siddiqi

ECONOMIC DIPLOMACY CANADA <-> UAE CORRIDOR By Faizan Siddiqi, Digital Growth & Transformation Leader

The Corridor Nobody Is Building Canada and Dubai agreed to negotiate a free trade agreement. The capital is flowing, the compute is being built, and the startups are ready. What is missing is the bridge. On November 20, 2025, Prime Minister Mark Carney and His Highness Sheikh Mohamed bin Zayed Al Nahyan announced the intent to negotiate a Comprehensive Economic Partnership Agreement (CEPA) between Canada and the United Arab Emirates. Global Affairs Canada closed its public consultation in January 2026. Negotiations begin this year. Fifty years of diplomatic relations are about to become something much bigger and almost nobody in the Canadian business community has noticed. What follows is what the data says about this corridor, and what it will actually take to build it.

The Numbers Tell a Lopsided Story | And Lopsided Means Opportunity

Bilateral merchandise trade between Canada and the UAE reached $3.4 billion in 2024. Canadian exports grew 24 percent in a single year to $2.6 billion, making the UAE Canada's largest export market in the entire MENA region. Canadian imports from the UAE, by contrast, were just $800 million.

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Economic Diplomacy

Now look at investment, where the asymmetry inverts. UAE foreign direct

investment in Canada reached $8.8 billion in 2024 , the UAE ranks among Canada's top fifteen foreign investors, with DP World operating terminals at the Port of Vancouver and Port of Saint John, and Mubadala partnering with the Ontario Teachers' Pension Plan. Canadian direct investment in the UAE? Just $242 million. Quebec's CDPQ separately invested US$5 billion into DP World's Jebel Ali Port, Jebel Ali Free Zone,

and National Industries Park , valuing those assets at US$23 billion, and marking one of the first times a strategic foreign investor was invited into critical UAE infrastructure.

The capital already trusts this corridor. The pension funds got there first. The companies have not followed , yet. Over 150 Canadian companies operate in the UAE and more than 40,000 Canadians call it home. But the flow is thin relative to the opportunity, and it is dominated by giants. The mid market , Canada's scale ups, its AI companies, its agri food exporters, its clean tech firms, has no map, no guide, and no on the ground champion. That is the gap CEPA will expose.

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Economic Diplomacy

The Compute Century: What Dubai Offers Canadian AI

Canada produces world class AI research, Toronto, Montreal, and Edmonton built the deep learning revolution, but Canadian AI companies face a compute famine at home. The UAE is building the opposite problem: Stargate UAE, a US$30 billion, ten square mile AI campus that broke ground in Masdar City in March 2026, will anchor a 5 gigawatt UAE US AI Campus built by G42, OpenAI, Oracle,

NVIDIA, Cisco, and SoftBank. The first 200 megawatt cluster goes live this year. Microsoft has committed $15.2 billion to the UAE, including a 200MW Khazna expansion also live before the end of 2026. Analysts now position the UAE as a top three global AI infrastructure jurisdiction by 2030 with

The Reverse Flow: Canada as Dubai's North American Proving Ground

The conversation is always framed as Canadian companies going to Dubai. The larger untold opportunity runs the other way. For Dubai companies with North American ambitions, Canada is the smartest first move

on the board:a G7 regulatory environment that de risks US entry, a multicultural consumer market that mirrors global demographics, USMCA adjacency, and critically in the current environment a stable,

compute that OpenAI says will serve half the world's population within a 2,000 mile radius.

Here is the partnership nobody is brokering: Canadian AI companies , model builders, applied , scale ups, health AI and climate AI ventures all need sovereign grade compute, patient capital, and market access to the Global South. The UAE has all three, plus MBZUAI, the world's first graduate AI university, and a Responsible AI foundation co built with Microsoft. In the other direction, the UAE needs exactly what Canada over produces: AI research talent, regulatory credibility, and cold climate data centre expertise. This is not a trade relationship. It is a complementarity waiting for an operator.

neutral partner at a moment when the World Bank has trimmed UAE growth forecasts and regional volatility is pushing Emirati firms to diversify their market exposure westward.

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Economic Diplomacy

The sectors are concrete, not hypothetical: Logistics and ports: DP World already proved the model in Vancouver and Saint John. The next wave is freight tech, cold chain, and trade finance platforms piloting in Canadian corridors. Food security and agri trade: the UAE imports the overwhelming majority of its food; Canada is an agricultural superpower. Emirati agri tech and food companies can source, process, and co brand in Canada while securing supply. Aluminium, petrochemicals, and construction materials: core UAE non oil exports with established Canadian demand , currently flowing through intermediaries who capture the margin a direct corridor would return to both sides. Islamic finance and fintech: Canada hosts one of the West's largest Muslim

The gap: No systematic engagement with Canada's real ecosystem infrastructure. Canada's economic power is federated: Global Affairs and the Trade Commissioner Service, provincial ministries, Invest in Canada, and the ecosystem layer startup associations, innovation hubs, university AI institutes,

populations, and Dubai's DIFC licensed fintechs can pilot Sharia compliant products in Toronto before scaling across North America.

chambers of commerce. Relationships with this

Tourism, aviation, and hospitality: Emirates and Etihad already connect the markets; the layer above , destination investment, hospitality brands, creator economy platforms is wide open.

layer need to be systematic, not occasional, for a corridor to compound rather than reset every

Dubai does not need another promotional brochure in Canada. It needs a proving ground strategy.

year.

▪ The gap: No

intelligence product that makes Dubai

4) What Is Missing And What It Will Take

legible to Canadian

The deficiency is not interest, capital, or product market fit. It is representation and orchestration. Specifically:

Canadian executives and boards act on data, not invitation letters. The corridor needs a recurring, data driven publication market maps, sector briefs, CEPA readiness guides that translates Dubai's own research into content Canadian decision makers actually read, share, and act on.

▪ The gap: No permanent, senior, credible presence on the ground in Canada. Trade missions fly in and fly out. Momentum dies in the airport. The corridor needs a presence embedded in the Canadian ecosystem in the accelerators, the pension funds, the provincial trade offices, the founder communities that owns the relationship every single day. Economic diplomacy is a contact sport played in person.

▪ The gap: No structured working groups pairing sectors, not ceremonies. What works is small, mandated, sector specific working groups: AI and compute; agri food and food security; logistics and trade tech; Islamic finance; creative economy. Each with named members from both sides, a deal pipeline, and quarterly accountability. Not galas. Pipelines.

decision makers.

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Economic Diplomacy

▪ The gap: No startup to flagship event escalator running yearround. Selection for flagship events like GITEX should be the end of a twelve month pipeline scouting, mentorship, Dubai readiness coaching, soft landing support , not just a one week sprint before the flight if this is to be done seriously. Build the escalator, and the flagship event becomes the graduation ceremony of a permanent corridor rather than an annual reset. But it had to start some where.

5) The First Year Playbook A serious first twelve months for this corridor looks like this:

▪ Quarter one: activate, do not build. Convert existing chamber,

ecosystem, and institutional investor relationships (CDPQ, Ontario Teachers', OMERS, CPPIB) into a live contact map with named owners on both sides.

▪ Quarter two: launch three sector working groups AI and compute,

agri food, logistics each with five committed members per side and a target of two signed pilots within nine months.

▪ Quarter three: publish the first Canada Dubai Corridor Report, timed to the CEPA negotiation calendar, and run a Toronto flagship event

anchored by one marquee announcement rather than twenty speeches.

▪ Quarter four: deliver a reverse trade mission ten Dubai companies, three sectors, structured B2B calendars in Toronto, Montreal, and Vancouver and stand up a year round startup escalator feeding the following year's flagship cohort.

Measured in signed pilots, companies established, capital committed, and founders moved not in photographs.

The Question Left CEPA negotiations begin now. The compute is being poured in Masdar City now. The pension funds moved years ago. The only question left is who builds the bridge for everyone else and whether it gets built with the discipline of a trade desk or the enthusiasm of a delegation photo op.

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How Regional Innovation Hubs Are Reshaping

Canada’s Economy By Hammad Siddiqui

Canada's startup economy is often described in terms of three key centres: Toronto, Montreal, and Vancouver. These cities have deep pools of capital, established

accelerators, research universities, experienced founders, and global technology ties. However, Canada's next generation of high-growth companies will not be built solely in those markets. Local startup ecosystems in the Prairies, Atlantic Canada, Northern Ontario, Québec City, the Waterloo region, Ottawa, Edmonton, Calgary, Winnipeg, Saskatoon, Halifax, St. John's, and

smaller cities are becoming better

equipped to help founders build and scale. Their advantage does not lie in imitating Toronto or Vancouver. It lies in regional strengths in

agriculture, energy, ocean technology, manufacturing,

aerospace, life sciences, artificial

intelligence, natural resources, and community-based entrepreneurship. A regional innovation ecosystem is

more than a co-working space, a pitch competition, or a local startup

Image Courtesy: Canva

event. It is the network that connects entrepreneurs with customers, talent, research, mentorship, financing, facilities, government programs, and export markets. When those pieces come together, a company can start in a smaller Canadian community without having to leave right away to find major backing. Saskatchewan's recent investments in technology, agriculture, and artificial intelligence show how public funding can support the local organizations that make this possible.

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Regional Innovation

What Makes an Ecosystem Work A strong startup environment consists of several interconnected components. Universities and colleges develop talent, conduct research, and foster future entrepreneurs. Incubators and accelerators help entrepreneurs develop ideas, refine business models, meet mentors, and prepare for financing. Local investors, banks, angel networks, and venture funds provide capital. Industry groups and established businesses generate early customer leads and sector expertise. Government also has a practical role. It can fund research commercialization, strengthen incubators, support technology adoption, finance scale-up projects, and design programs that help companies enter new markets. Municipal governments can contribute through procurement, zoning, broadband, transit, commercial services, and partnerships with local institutions.

The key is coordination. A founder should not have to leave a region to obtain basic support such as technical mentorship, a pilot customer, a lab, an investor introduction, or help navigating government programs. Regional ecosystems become sustainable when they offer repeatable paths from concept to commercialization and expansion.

Saskatchewan’s Ecosystem Test Case In April 2026, the federal government announced more than $7.9 million for Saskatchewan's technology and AI sectors, spread across six organizations and two programs. Co.Labs, the province's technology incubator, received $3.76 million under the Regional Innovation

Ecosystems program to deepen ties with ecosystem partners, expand its expert-in-residence programs, strengthen agtech programming, and

hold three Uniting the Prairies conferences between 2026 and 2028. A further $10,000 went to Artificial Intelligence Saskatchewan for its Sask AI Expo. Another $4.17 million came through the Regional Artificial Intelligence Initiative, largely as repayable funding for companies commercializing AI products: Coconut Software, Vendasta Technologies, and HomeTeam Live Technologies. A University of Regina project using tree-ring data to predict climate change and soil moisture also received support. This model is significant because it does not rely on funding startups one at a time. Ecosystem funding goes to organizations that support many companies at once, while AI funding goes to firms commercializing specific products. An incubator can support dozens of founders, prepare businesses for financing, connect local innovators to national networks, and host events that bring together founders, researchers, customers, and investors. For a province like Saskatchewan, this approach can build on existing strengths in agriculture, agtech, resource sectors, digital services, and AI-enabled business tools.

Local Strengths, Global Markets The most successful regional ecosystems focus on industries where their location offers a clear advantage. A startup hub does not need to compete in every technology field. It needs to be useful in sectors where it has research strength, talent, customers, infrastructure, or specialized knowledge. Saskatchewan can support

agtech by drawing on its agricultural producers, food systems, research institutes, and businesses that understand the industry's real-world operating challenges.

Atlantic Canada can build on its strengths in maritime technology, fisheries, renewable energy, and marine research. Alberta's ecosystem can link

technology to energy, industrial operations, carbon management, agriculture, and

health innovation. Northern and rural areas can offer experience in mining, forestry, Indigenous entrepreneurship, food production, remote services, and climate adaptation.

The advantage is proximity to real customers. A startup building technology for farms, hospitals, mines, ports, or factories benefits from local organizations willing to test, advise on, and buy new products. That early customer access can matter more than generic startup advice.

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Regional Innovation

The Role of Regional Agencies

What Founders Should Do

Canada's regional development agencies are mandated to promote economic growth based on local conditions and priorities. The seven are PrairiesCan, FedDev Ontario, FedNor, PacifiCan, the Atlantic Canada Opportunities Agency, Canada Economic Development for Québec Regions, and the Canadian Northern Economic Development Agency. These agencies deliver region-

Founders outside Canada's biggest cities should make the most of their position.

specific programs to support innovation, productivity, commercialization, export growth, technology adoption,

and business expansion. For example, the Regional Economic Growth through Innovation program, delivered by the agencies across the country, supports businesses and organizations that advance regional innovation and economic development. The federal government has also pledged $200 million over five years for the Regional Artificial Intelligence

Initiative. The initiative aims to help businesses bring AI innovations to market and encourage AI adoption in key

sectors such as agriculture, clean technology, health care, and manufacturing. For entrepreneurs, the practical lesson is to get to know their regional agency. These agencies can provide funding, referrals, industry intelligence, and

links to local ecosystem partners that national programs may not offer.

Identify the region's leading industries and prospective pilot customers. Join local incubators, accelerators, founder communities, and industry associations. Build relationships with universities,

colleges, research labs, and economic development offices. Contact your regional development

agency before applying for support. Attend national events and build investor relationships beyond your local market. Design early pilots with local partners, then use proven results to sell nationally and internationally.

When founders are both locally anchored and globally linked, a regional ecosystem gains strength.

The Bottom Line

Beyond Funding: The Missing Links

Canada's next startup success stories can

Regional ecosystems do not become globally competitive through funding announcements alone. They must close the practical gaps founders face every day. First, access to capital must improve. Local angel investors are crucial, but companies preparing for national or global expansion need connections to investors across Canada and abroad. Second, talent retention matters. Regions need pathways that let students, researchers, skilled immigrants, and seasoned operators see a long-term future locally.

By supporting institutions that connect

Third, startup infrastructure must match local sectors. An agtech company may need test farms and field data. A biotech company needs specialized laboratory facilities. Cleantech companies may need pilot sites, industry partners, and equipment. A digital startup needs reliable broadband, cybersecurity, and customer access. Finally, regional ecosystems need stronger links to one another. Canadian founders should be able to continue operating in Saskatoon, Halifax, Winnipeg, or St. John's while gaining access to national funding, customers, and collaborators. 53 - Startup Growth - October 2026

come from anywhere, but only if founders have access to the same building blocks: talent, funding, customers, research, infrastructure, and experienced support. Saskatchewan's recent investment in Co.Labs and AI commercialization offers an instructive example.

founders with opportunities, governments can help regional communities create more local startups that solve real industry problems and compete worldwide. The future of Canadian innovation is not confined to big cities. It is spreading across the country.

Accelerating the Journey from Discovery to Market By Tehmina A Chaudhry Clinical trial infrastructure is more than just an administrative issue for Canadian biotech founders. It is critical to determining if a discovery can be turned into a product, whether investors will fund a company, and whether patients may access Canadian-developed innovation. Canada boasts outstanding research hospitals, universities, scientists, physicians, and life-science

enterprises. However, the country is losing ground in the worldwide race for clinical studies. According to a 2026 study from the government-mandated Pharmaceutical and Life Sciences

Sector Task Force, Canada's proportion of global clinical trials fell from 6% in 2021 to under 4%.

According to the paper, this drop has an estimated potential cost of $2.5 billion in clinical trial spending and 20,000 jobs.

The Journey From Discovery to Trial Scientific research is the foundation of any promising medicine or medical technology, but it cannot reach patients unless there is evidence to support it. For many biotechnology companies, the clinical trial marks the transition from laboratory potential to real-world proof. Before a trial can begin, founders may need to complete preclinical work,

establish manufacturing processes, create an Investigational New Drug package or equivalent regulatory documentation, identify clinical investigators, secure institutional participation, negotiate contracts, obtain research ethics approval, and recruit suitable patients. Each level has appropriate safeguards. Health items must be tested responsibly, patient

safety must be prioritized, and research data must be reliable. However, when these processes are carried out individually across provinces, hospitals, ethics boards, and public health systems, delays and duplication might make Canada less appealing than other trial sites.

For a founder, time lost to scattered approvals is more than

an inconvenience. It can affect cash runway, investor confidence, trial costs, partnership talks, and the company's ability to meet the development milestones required for its next financing round.

The difficulty extends beyond physical lab space and financing. Canada needs an integrated system that enables innovators and sponsors to navigate regulatory review, research ethics approval, contracting, trial site selection, patient recruitment, data collection, and post-trial commercialization quickly. Rebuilding that infrastructure may transform clinical trials into a competitive advantage for Canadian biotechnology, making it easier for breakthroughs generated in Canadian labs to reach Canadian patients.

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Image Courtesy: Canva

Technology Commercialization

Fragmentation Is the Core Problem

A Pan-Canadian Trial System

Canada's clinical trial environment reflects the country's decentralized healthcare system. Provinces and territories play important roles in health-care delivery. In contrast, hospitals, universities, research institutes, research ethics committees, and individual trial sites handle many of the practical aspects of study approval and implementation. This structure may result in variations in ethics assessments, legal agreements, privacy regulations, contract discussions, patient recruiting methods, and data-sharing arrangements. A multi-site clinical trial may require repeating similar work across institutions, even when the research procedures are largely the same.

The task team proposed many measures that point to a more integrated national paradigm. These include pan-Canadian ethics review and contracting, national harmonization of research ethics clearances, improved trial coordination, a single-window concierge service, and funding for a national clinical-trials infrastructure platform and capacity expansion. A harmonized ethics review strategy would imply that an approved

The Pharmaceutical and Life Sciences Sector Task Force

characterized Canada's clinical-trials environment as underperforming due to structural hurdles, multiple regulatory pathways, fragmented investment, inadequate data

infrastructure, and related policy difficulties. It suggested steps to make the country faster, more coordinated, and competitive.

Canada does not need to lower its standards to increase performance. The goal should be a system that protects participants while avoiding unnecessary duplication. Consistent ethics standards, predictable contracting, defined timetables, and improved coordination can boost research quality and commercial competitiveness.

multi-site study need not repeat the same ethical assessment at each

participating institution. Local site considerations would remain relevant, but core review processes may become more standard.

Standardized or pre-approved contract templates may also minimize one of the least visible but most persistent barriers to starting a study. Legal agreements between sponsors, hospitals, universities,

Protecting a Key Advantage

and investigators can take a long time, particularly for early-stage enterprises that

One of Canada's benefits is Health Canada's 30-day Clinical Trial Application review period. The task committee specifically urged Canada to preserve and actively promote this schedule as a worldwide competitive advantage, while avoiding legislative changes that could lead to delays or uncertainty. That timescale is important since worldwide clinical trials are competitive. Pharmaceutical businesses and biotech sponsors can choose from a variety of nations and trial sites. They take into account scientific competence, patient demographics, healthcare data capacity, recruitment possibilities, regulatory predictability, prices, and speed.

lack significant legal teams. A single-

A predictable review process enables businesses to plan accordingly. But a speedy government decision is insufficient if additional ethics approvals, site contracts, privacy reviews, and recruitment processes take months to complete. Canada has the opportunity to connect these processes into a more continuous pathway, from application to initial patient enrollment. For entrepreneurs, the most important lesson is that regulatory and operational timescales are not the same. A clinical development plan should consider both from the start.

optimum arrangement would protect

window clinical trial concierge could help inventors navigate the system. Rather than requiring each organization to independently identify trial sites, provincial channels, ethics board expectations, and accessible support, the service may guide sponsors to the appropriate institutions, networks, expertise, and processes. The

provincial and institutional duties while giving researchers and investors the impression that Canada is a single, unified destination.

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Technology Commercialization

Recruitment, Data, and Site Capacity

The Bottom Line

Clinical trials are only successful if they enroll participants and generate reliable data. Canada's future competitiveness will rely on more than just speedier clearance processes. Trial sites require qualified coordinators, investigators, research nurses, administrative personnel, digital tools, and ongoing funding. Hospitals and research centers must also be able to identify eligible patients, ethically explain trial options, and encourage participation from historically underrepresented communities in research. Data infrastructure is equally crucial. The task committee advocated for national

Canada has the research capacity to lead in the life sciences, but it requires clinical trial infrastructure commensurate with its scientific objectives. Faster, more integrated ethics review, contracting, site activation, data access, and patient recruiting would make Canada more appealing to worldwide sponsors

could help founders improve study feasibility, find qualified patients, assess outcomes, and strengthen the evidence package required by regulators, investors, health systems, and commercial partners.

For founders, the infrastructure challenge is straightforward: how

coordination of health data and real-world evidence, as well as a pan-Canadian real-time data framework. Better data infrastructure

Privacy and public trust must remain central. Connected systems should use secure governance, clear consent methods, and safeguards that comply with provincial laws and patients' rights.

What Founders Should Do Now Founders cannot wait for policy reform before beginning clinical development. They should begin trial preparation early. Create a regulatory plan before finalizing the product development timeframe.

Early engagement with clinical investigators, research sites, and patient organizations is essential. Budget for ethics review, contracting, site activation, recruitment, data administration, and monitoring, not just laboratory science. Choose trial partners who have relevant treatment experience and established operational capabilities. Prior to fundraising for a clinical stage, create documentation, quality systems, privacy controls, and data governance protocols. Monitor policy changes influencing Health Canada reviews, ethics harmonization, clinical trial coordination, and R&D incentives. A clinical trial is more than just the last stage of research. It is a company-building event that influences finance, collaboration, valuation, regulatory legitimacy, and the path to market. 56 - Startup Growth - October 2026

while also making life easier for domestic biotech entrepreneurs.

soon can a promising innovation transition from the lab bench to a well-run Canadian trial? The outcome will determine whether

Canada maintains more of the health innovations it develops—and if Canadian patients benefit sooner from the breakthroughs generated here.

In an exclusive interview with Startup Growth Magazine, Paul Ryan, Founder of KoruStay, shares how technology can help short-term rental hosts simplify operations while creating more valuable and connected guest experiences. Drawing from his own experience as a host, Paul discusses the frustrations that inspired KoruStay and the opportunity to rethink the traditional digital guest guide.

Interview By Hammad Siddiqui Paul Ryan is the Founder and Lead Developer of KoruStay, a New Zealandbased enterprise hospitality technology platform. Drawing on over a decade of experience scaling operations for global Image Courtesy: Paul Ryan

corporations, Paul identified a massive operational gap in the short-term rental market. He built KoruStay to empower independent accommodation providers, integrating Google Gemini AI and world-first SEO technology (KoruSignalTM). This enables hosts to

Paul Ryan,

Founder of KoruStay

automate operations, protect their margins, and deliver flawless hospitality while actively boosting both their own brand and the wider local economy through organic search visibility.

Smarter Stays, Stronger Margins:

How KoruStay Empowers the Modern Host

SaaS & Hospitality KoruStay is described as a “digital co-host” for shortterm rentals. What challenges in the traditional guest experience inspired you to create it, and how did those insights shape your first version? As a host myself, I was frustrated by constantly reprinting physical welcome manuals andanswering

repetitive questions like "what's the Wifi password?". Existing digital guides from Property

Management Systems were subpar, often functioning as "pretty PDFs" that guests endlessly scrolled through.

I wanted to build a frictionless, mobile-first Web App requiring

no app download that guests actually enjoyed using. But it has another function - connecting guests to local attractions,cafes, restaurants and events, acting

Hosts often juggle bookings, guest communication, and recommendations across multiple tools. How does KoruStay simplify this in day-to-day operations, and what improvements have you seen in guest queries, last-minute changes, and upsells? KoruStay acts as a complete "Hosting OS." For guest queries, our Google Gemini-powered AI Concierge, "Ask Pio," learns specific property rules to answer questions instantly in 100+ languages, eliminating late-night texts. For day-to-day management, our Agency plans feature "Global

Overrides." Propertymanagers can update policies or instantly swap out contact details for temporary staff across their entire portfolio with one click, giving them full control without the endless paper printing.Furthermore, because KoruStay operates independently, if you ever dislike your PMS and decide to switch, your KoruStay guide and setup stay perfectly intact.

On the revenue side, we transform guides into automated storefronts. Hosts can process upsells like late checkouts via their own Stripe integration for 0% commission, or use our native KoruStay Upsells at a lower fee than major platforms, effortlessly expanding profit margins. It's all about simplicity for the guest and the host.

Image Courtesy: Canva

as a digital 'value bridge'. I wanted a platform that actively supported local businesses and

made those crucial connections with visitors But it goes beyond just guest spending. Even if a guest simply taps a local recommendation in the KoruStay guide without visiting, that interaction sends powerful SEO signals to Google and AI search engines, boosting the online ranking of that local business. This decentralized approach creates a powerful local economic multiplier, transforming a simple guest guide into an engine for regional organic growth.

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SaaS & Hospitality KoruStay blends Kiwi hospitality with smart processes. Which features have been most important in building trust with hosts and guests, and how do you balance automation with a personal touch? Kiwi hospitality is rooted in the concept of "Tiaki" - caring for people and acting as guardians of the land. We baked this ethos into our tech. Environmentally, moving away from printed compendiums saves massive amounts of paper waste across the industry, supporting our sustainability goals. Socially, hosts can tailor the tone of our AI, "Ask Pio," to retain that welcoming Kiwi hospitality angle. This translates beautifully globally, ensuring guests feel like they are interacting with a warm virtual host, not a generic chatbot.

To build ultimate trust, we developed a world-first Automated Safety Engine synced to government emergency feeds. For example, if there's a severe storm warning, that will come through automatically on KoruStay, alerting guests of the local conditions and advice. We automate the heavy lifting -

weather alerts, translations, and instant answers - so hosts can focus their energy on the physical, personal touches that truly elevate a stay while protecting the environment..

With so many tools in the short-term rental space, where does KoruStay fit? How do you approach integrations and partnerships so it becomes a core part of a host’s workflow rather than just another app? While we seamlessly integrate as an operational layer alongside major Property Management Systems, our core philosophy is that a guest guide must be an active marketing asset. KoruStay is the only guest guide globally engineered with proprietary SEO infrastructure, KoruSignalTM. When a guest taps a local cafe recommendation, KoruSignal translates that physical interaction into algorithmic authority, boosting local organic growth for both the host and the surrounding economy. Beyond tech, we are highly focused on collaborative growth. We are always open to partnerships and currently provide our hosts with excellent exclusive offers from our network.We have several exciting new partnership announcements coming in the next few months that will further embed KoruStay as an indispensable, value-adding part of a host's workflow rather than just another app.

As guest expectations and technology evolve, what is your long-term vision for KoruStay?And what advice would you give to founders building SaaS products for traditional industries like hospitality? Our long-term vision keeps the Guest at the absolute center of our focus while balancing ROI for the Host. Guests demand frictionless, helpful, exciting experiences.

Currently, information for traveling guests is highly siloed across fragmented websites, endless search results, private local Facebook community groups that guests

can't access,or OTA platforms that take a 20% cut of a local business's revenue. We are looking to bridge that gap with a new

community feature in the near future. This will allow guests to discover not just established businesses with websites, but ad-hoc, grassroots community activities, giving them a truly hyper-local experience. Moving forward, we want guests to feel hosted by a dedicated

virtual concierge with a true "Host feel," completely avoiding the generic AI bots the industry relies on. My advice to SaaS founders in traditional industries is simple: solve immediate friction first. Deliver an effortless, magical experience for the end-user, and the operational ROI will naturally follow.

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Image Courtesy: Canva

The Health Tech Founder’s

Guide to Compliance and Evidence By SK Uddin A health-tech startup isn't ready for the health-care sector just because it has built an app. Hospitals, clinics, public health systems, doctors, investors, and regulators need proof that the product is safe, effective, secure, and able to operate in

complex care settings. That is the difference between a promising pilot and a deployable health technology. A founder may have an appealing interface, a capable AI model, or early interest from a hospital department.

However, before a solution can be used widely in clinical and commercial settings, the company must answer some hard questions. Will regulators classify the product as a medical device? What clinical claim does it make? What proof supports that claim? How is patient data protected? Can the product share data with other health-care systems? Can the startup pass procurement and cybersecurity reviews? In Canada, regulatory readiness is a product and business discipline. Founders who start early can build confidence with health-care partners, reduce delays, and avoid discovering late in the sales process that their product fails a critical requirement.

Begin With Intended Use The most important early decision is the product's intended use. A wellness app, administrative scheduling tool, or medical transcription product may carry different regulatory implications than software that diagnoses a condition, advises on treatment, detects disease, calculates a clinical risk score, or directly affects patient care. Health Canada regulates medical devices according to their intended use and risk. Some digital tools may be classified as Software as a Medical Device, or SaMD, if the software serves a medical purpose. Founders should not treat regulatory classification as an afterthought to their marketing claims.

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Healthcare Compliance Wording on a website, investor deck, sales presentation, user instructions, or app store page matters. Health Canada requires the stated indication for use to be unambiguous, and promotional statements must match the official intended use determined during authorization. A practical first step is to write a one-page intended-use statement that sets out who will use the product, what it does, the clinical setting, the decision it supports, and what it expressly does not do.

Make Risk Management Continuous

Build Evidence Before Selling

alerts, clinician review, escalation pathways, and ongoing performance monitoring.

Health-care buyers will ask for proof. The

required evidence varies with the product's risk, intended use, and customer context, but founders should not assume a pilot

automatically demonstrates clinical value. A pilot may show that a product can be adopted, that clinicians like the workflow, or that patients engage with the app. Those are useful findings. However, a product making therapeutic,

diagnostic, predictive, or treatment-related claims may need stronger evidence that it works

as intended and does not pose an unacceptable risk. Founders should build an evidence plan that includes: The product's claim and the outcomes needed to justify it. The intended users, patient population, and clinical workflow. Usability testing and human factors analysis. Technical validation, reliability testing, and security testing. Where applicable, clinical evaluation or performance data. A process for recording limitations, adverse events, complaints, and product changes. Testing for AI-enabled products should cover not only average performance, but also potential bias, subgroup performance, false positives, false negatives, model drift, and cases requiring human review. Evidence isn't just for regulators. It gives clinicians confidence and helps investors understand why the product can scale.

Risk management should start while the prototype is being designed. In health technology, risk can come from an incorrect recommendation, missing data, an inaccessible system, poor usability, a biased model, an integration failure, an unauthorized disclosure, or a user misreading the product's output. A realistic risk register lists known hazards, who could be affected, the likelihood and severity of harm, the controls in place, and evidence that those controls work. For example, if an AI triage tool misclassifies a high-risk patient, safeguards could include confidence scores, visible

Risk management must continue after launch. A startup should record complaints, incidents, corrective actions, software updates, security events, and changes to the product's intended use. As a company expands from a single hospital pilot to several deployments, founders' informal knowledge must be formalized into processes that can be reviewed, reproduced, and audited. This discipline protects patients, but it also safeguards a startup's brand and business partnerships.

Privacy and Patient Data Health information is among the most sensitive

categories of personal information. The Office of the Privacy Commissioner of Canada treats health, genetic, biometric, and financial information as types that call for greater protection. Before collecting or receiving patient information, health-tech founders need a clear data governance model. At a minimum, it should explain: What data is collected, and why? The legal and operational framework for collection, use, disclosure, and retention. How consent is obtained, documented, changed, or withdrawn where it is required. Where data is stored and processed, including any cross-border transfers. Which employees, health-care organizations, cloud providers, and subcontractors have access. How the startup handles access requests, corrections, privacy complaints, and data destruction.

Healthcare Compliance PIPEDA applies to many private-sector businesses in Canada, though provinces with substantially similar privacy laws may be exempt in some cases. Health information held by health-care providers may be governed by provincial health-information legislation and other public-sector privacy rules. Founders should not assume a single general privacy policy fits every hospital's needs. A privacy impact assessment, data flow map, vendor registry, encryption

standards, role-based access, and audit logs are frequently required for procurement readiness.

Interoperability Is Market Access A health product adds more value when it fits into clinical workflows rather than forcing doctors to work around it. That makes interoperability a commercial requirement,

not just a technical preference. Hospitals may expect a digital-health solution to integrate with electronic medical records, laboratory systems, scheduling tools, identity management systems, or provincial health

Prepare for Procurement Hospitals and health authorities buy more than software. They buy a risk-managed partnership. Procurement teams may ask for security questionnaires, privacy assessments, proof of insurance, service-level commitments, accessibility information, data residency details, business continuity plans, and evidence that the company can support the product over the long term. Founders should build a reusable trust and procurement package, which includes: A product summary and a statement of intended use. Privacy and security summary. Architecture and data flow diagrams. Evidence and validation materials. Risk management and incident response procedures. Vendor and subprocessor information. Business continuity, backup, and support plans.

Interoperability documentation and implementation requirements. This preparation reduces repetitive work and signals maturity. It also helps a company distinguish between a customer ready to buy and one merely interested in a low-commitment pilot.

platforms. Every integration raises questions about authentication, data standards, permissions, audit trails, and accountability.

Canada Health Infoway's Connected Care Trust Framework Blueprint outlines a nationwide approach to trustworthy healthdata exchange across Canada. Federal, provincial, territorial, and Indigenous partners developed it collaboratively. A startup does not have to integrate with every platform at launch. However, it should have an interoperability plan that identifies the systems used by target customers, selects appropriate standards and interfaces, documents the data being exchanged, and designs secure integration patterns early. A product that can't fit into existing workflows may end up a costly standalone pilot rather than a scalable procurement opportunity.

The Bottom Line In Canadian health care, a strong app is just the beginning. Health-tech founders must show that their products have a clear intended use, credible evidence, responsible risk management, reliable privacy practices, and a realistic integration and procurement strategy. The best time to lay this groundwork is before the first large pilot, not after a hospital sends a lengthy security questionnaire or a regulator disputes a product claim. Founders who treat regulatory readiness as a core product feature can earn trust faster, move through procurement more efficiently, attract stronger partners, and improve their technology's chances of reaching the patients and doctors it was built to serve.

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Québec’s Fonds Impulsion and the Future of Co-Investment By Tehmina A Chaudhry Image Courtesy: Canva

Early-stage Canadian entrepreneurs face a common financing challenge: they need enough capital to build a product, hire a small team, validate the market, and reach early commercial milestones, yet they are often too early for larger venture capital rounds and too risky for traditional finance. Québec's response increasingly centres on co-investment. Fonds Impulsion, a $200-million fund managed by Investissement Québec, aims to make pre-seed and seed financing more accessible to high-potential technology startups. Rather than displacing private investors, the fund is meant to invest alongside them, matching marketbacked ventures and sharing early risk.

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The central question is whether government-sponsored co-investment can boost the startup pipeline without displacing private venture funding. Québec's strategy suggests it can, provided public funds are disciplined, guided by reputable private investors, linked to incubators and universities, and focused on helping companies reach their next investable milestone.

Venture Capital

The Pre-Seed Financing Problem

Why Matching Capital Matters

Pre-seed and seed-stage companies are in the hardest phase of startup financing. They may have a strong founding team, intriguing intellectual property, early customer interest, or a groundbreaking scientific discovery. However, they often lack the revenue, traction, or demonstrated market need to attract significant institutional venture funding. This gap is especially significant for deep-tech, artificial intelligence, life sciences, climate-tech, and hardware companies. Before

The most effective public co-investment programs do not try to outperform the market. Instead, they use government funds to amplify private investment. A matching approach can persuade private investors to back earlier or more technically complex companies because their money goes further. If a private venture fund invests $500,000 in an eligible company and a public co-investor agrees to

prototypes, regulatory preparation, or lengthy product development cycles.

That additional funding might go toward product development, early hiring, customer pilots, regulatory preparation, or intellectual

demonstrating commercial results, these ventures may need costly research, specialized skills, lab access,

Private angels and venture money remain critical. They offer capital, market discipline, governance, and customer and investor networks. However, when early-stage investors pull back or focus on larger, lower-risk deals, promising

young companies may struggle to bridge the first funding gap. A public co-investment tool can help by increasing the size of an existing private deal, lengthening a startup's

runway, and helping founders produce the evidence needed for their next fundraising.

How Fonds Impulsion Works Québec launched Fonds Impulsion in 2025 as a $200million vehicle to support high-growth pre-seed and seed-

stage technology companies. Investissement Québec manages the fund, which builds on the province's earlier Impulsion PME strategy. The key feature is its co-investment structure. Fonds Impulsion intends to invest alongside private lead investors rather than selecting and financing each company on its own. In practice, a business must be based in Québec, be connected to a recognized ecosystem partner such as an incubator, accelerator, or venture capital investor, and have a lead investor already involved in the funding round. This structure matters because it creates a two-part filter. The private lead investor examines the company's commercial prospects and invests its own funds. Investissement Québec then conducts its own due diligence before deciding whether to invest on similar terms. The public investment is not a substitute for the private investor's stake. It sits alongside it. This lets a seed-stage company raise a larger round while leaving private capital in the role of identifying, pricing, and supporting highpotential opportunities.

comparable terms, the company may raise a $1-million round rather than a $500,000 round.

property work.

The reward for founders goes beyond

receiving a bigger cheque. It is the ability to reach a more significant milestone before returning to the market. A company with a working product, early customers, validated

scientific data, or repeatable revenue is typically better positioned to attract the next

investor. For the province, the potential return is broader: more firms can stay in Québec long enough to hire, commercialize, develop

intellectual property, and eventually scale up.

The Ecosystem Connection Fonds Impulsion works best as part of a larger ecosystem rather than as a single pool of money. Québec has built a dense network of university-linked incubators, accelerators, investors, research institutes, and commercialization organizations that can find and prepare prospective companies. Centech, District 3, CEIM, FounderFuel, and other Montréal groups help founders refine their business models, validate technology, connect with mentors, and prepare for financing. Centech, linked with the École de technologie supérieure, focuses mostly on deep technology, engineering, and medtech ventures, the kinds of companies that may need extra help before attracting institutional venture capital.

Venture Capital Québec's research-commercialization initiatives also help build the pipeline. Researchers and PhD founders can benefit from programs such as the Fonds de recherche du Québec's scientific-entrepreneurship projects, which help them take ideas from academia to business. The public fund, private investor, and incubator each have a unique role. The incubator improves founder readiness. Private

capital tests market conviction. The co-investment fund helps bridge the financing gap. Together, they can forge a more dependable path from research or prototype to commercial enterprise.

Avoiding the Crowding-Out Risk Public co-investment carries risk if it is not properly designed. If government money offers unusually favourable terms, ignores market signals, or competes with private funds for control of deals, it may deter rather than attract private investors. Québec's lead-investor approach is meant to reduce that risk. The requirement for a private

investor or ecosystem endorsement signals that public funds supplement, rather than replace, market-based funding decisions. Investing on the same terms also helps

avoid distorted valuations or unequal rights between public and private investors.

Measure whether companies secure follow-on funding and scale, not just whether they win first-round financing. The appropriate model will vary across Canada. Alberta may prioritize industrial technologies, energy transformation,

agriculture, and artificial intelligence. Atlantic provinces may prioritize ocean technology, cleantech, and health-care innovation. Ontario may deploy regional strategies to boost startup activity outside its major urban

centres. However, the essential premise stays the same: public money should ease a funding bottleneck while drawing additional private capital into the ecosystem.

The Bottom Line Fonds Impulsion is a practical attempt to solve one of the hardest startup problems: how to help a promising company raise enough early money without alienating the

private investors it needs for long-term success. The results of Québec's $200-million

Still, execution matters. The process must be fast enough

co-investment initiative will decide whether it works.

requirements should be explicit, and decision-makers should look at more than the number of cheques written. An effective program should track follow-on investment, job creation, revenue, intellectual property development, exports, survival rates, and the number of companies that advance to later-stage funding.

If it helps more founders turn research into businesses, attract follow-on financing, retain intellectual property, and build globally competitive companies, it could serve as a model for other Canadian provinces. The takeaway is not that government should replace venture capital. It is that welldesigned public financing can help private venture investment grow.

to meet startup financing timelines. Due diligence should be thorough, but it should not duplicate every step a trusted lead investor has already taken. Eligibility

Lessons for Other Provinces Other provinces can draw five useful lessons from Québec's model: Use private lead investors as a market validation tool. Concentrate public money on genuine financing gaps, particularly pre-seed, seed, deep-tech, and researchbased companies. Connect co-investment programs to incubators, universities, and commercialization organizations. Invest on transparent, market-aligned terms rather than creating a separate public funding market.

Your engagement helps strengthen a growing ecosystem of founders, builders, and business leaders. Startup Growth is designed to deliver practical insights, emerging trends, and realworld strategies that support entrepreneurial success. Click here to subscribe and follow our official channel. Stay connected to us for the latest developments in the startup landscape. Your continued support helps us spotlight innovation and opportunity across Canada. Disclaimer: The content published on StartupGrowth.ca is based on publicly available sources and is provided for general informational purposes only. Startup Growth does not endorse, recommend, or guarantee any products, services, organizations, or claims mentioned. Readers are encouraged to conduct independent research and exercise due diligence before making financial, investment, or business decisions.

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Why Canada’s Biotech Companies Struggle to Scale By Hammad Siddiqui Canada has the scientific foundation to build globally competitive biotechnology companies. Its universities, hospitals, research institutes, clinicians, and entrepreneurs are making promising advances in pharmaceuticals, diagnostics, medical devices, cell and gene technologies, and digital health. Yet many Canadian companies face a common problem: they can raise enough money to get started, but not always enough patient, specialized domestic capital to complete the long journey from laboratory discovery to clinical validation, manufacturing, and commercial scale.

This shortfall is known as Canada's life-sciences capital gap. A company may emerge from a university lab with intriguing intellectual property and preliminary research results, but biotechnology is not built for rapid product cycles. A product may need 10 to 20 years of financing, technical validation, regulatory work, clinical trials, and marketing before it reaches patients or generates meaningful revenue. During that time, companies may need many fundraising rounds and investors who understand scientific risk, not just software growth metrics. The federal government's proposed $200 million Life Sciences stream under the new Venture and Growth Capital Catalyst Initiative, or Growth VCCI, aims to address part of that problem. It could improve the funding environment. But it will succeed only if Canada pairs capital with stronger commercialization processes, clinical trial capacity, specialized incubators, and long-term participation by pension funds and other institutional investors. 66 - Startup Growth - October 2026

Biotech Commercialization

From University Research to Company Canada's biotech journey often starts at a research-intensive university, teaching hospital, or public laboratory. Researchers identify a promising therapeutic target, develop a novel therapeutic platform, build diagnostic technologies, or find a new use for a medical device. The science may be extraordinary, but building a sustainable business around it requires a different set of skills. Founders must secure intellectual property rights, recruit business leaders, validate the technology, design regulatory and clinical development plans, and raise enough money to reach specific milestones. Early support can come from university technology transfer offices, startup incubators, angel investors, seed funds,

academic grants, and organizations such as the National Research Council of Canada's Industrial Research Assistance Program. However, the hardest transition often comes after the initial proof of concept. Early financing can help a company gather data, file patents, or build a prototype. Clinical-stage development, production preparation, and market launch all demand far more

money, time, and investors willing to persevere through uncertainty.

Why Biotech Needs Patient Capital Unlike a typical software company, a biotech company cannot always grow through rapid customer acquisition or low-cost digital

distribution. Before selling a product, a therapeutics startup may need to complete preclinical testing, toxicity studies, manufacturing

Growth VCCI’s LifeSciences Stream Budget 2025 allocated $1 billion to Growth VCCI, which aims to boost private venture capital investment by drawing in pension funds and other institutional investors. The program has three streams: $700 million for funds-of-funds, $200 million for life sciences, and $100 million for emerging fund managers. The lifesciences stream is especially important. The federal government plans to invest the $200 million through venture capital fund managers that back innovative

Canadian life-sciences companies. Its stated goal is to strengthen domestic venture capacity and help entrepreneurs secure the funding they need to commercialize and scale in Canada. The stream's scope is broad, covering biotechnology, drug development, pharmaceuticals, medical technologies, and other

science-based products and services related to human health.

development, regulatory submissions, multi-phase clinical trials, and substantial evidence generation. These stages create significant capital requirements and long delays. They also carry binary risks: a clinical trial result, a regulatory decision, a safety concern, or a production failure can dramatically change a company's outlook. As a result, biotech investors need technical knowledge, a long investment horizon, and enough reserve capital to sustain companies through multiple rounds.

For biotech innovators, the initial

Canada has capable early-stage investors and strong regional lifesciences clusters, but it has historically had fewer large domestic funds able to lead later-stage rounds. This can push companies to seek foreign investors, relocate important activities, license intellectual property abroad, or accept acquisitions before their full long-term value is recognized in Canada. The issue is not foreign investment itself; international money can be critical. The question is whether Canada has the domestic capacity to negotiate from a position of strength while retaining high-value jobs, intellectual property, manufacturing, and decision-making.

whether the selected managers

impact will be indirect. Growth VCCI will not accept direct company grant applications. It will invest in fund managers, who will then invest in companies. The key question is

have the mandate, expertise, and fund size to help companies move past seed rounds and into the costly clinical and commercial stages.

67 - Startup Growth - October 2026

Biotech Commercialization