Y Combinator shutting out Canadian startups is the wake-up call we need

Y Combinator’s recent decision to no longer invest in Canadian-incorporated startups, requiring companies to reincorporate in the US, Singapore, or Cayman Islands, is seen not as a rejection of Canadian founders but of the Canadian system itself. Alistair Vigier, CEO of Caseway, argues this is a necessary wake-up call, as Canada’s cautious approach hinders speed and competitiveness compared to the US. He contrasts his company’s swift US deal completion with a stalled Canadian one, illustrating the difference in execution.

Y Combinator’s data supports this, showing US-incorporated startups achieving roughly twice the valuation of their Canadian counterparts. The author contends that Canada’s slow decision-making, risk-averse investors, and preference for committees stifle growth, while polite interest often masks a lack of progress. He emphasizes that Canadian founders are often forced to seek opportunities elsewhere due to a lack of readily available capital and networks.

While acknowledging national pride, Vigier advocates for prioritizing smart business decisions, even if it means incorporating in the US. He hopes that Canadian startups building abroad will eventually leverage their success to drive change within Canada, and urges a shift in perspective – choosing Delaware over British Columbia is not betrayal, but a strategic move for growth and access to vital resources.

(Source：Theglobeandmail)