Will Healthy Debate Spur Innovation? This blogger hopes so...

Toronto lawyer Suzanne Dingwall Williams wrote a very interesting piece for the CVCA blog last week,lamenting how often the startups she works with choose to seek investment from American VCs over their Canadian counterparts.

And just this week, fellow blogger Gary Will has taken a different view on the state of startup funding, at least in regards to his hometown and the hotbed of tech activity that is Waterloo, Ontario.

Kudos to both of these thought leaders within the Canadian VC community. My viewpoint on this subject lies somewhere between the two camps represented by Will (the startup workhorse) and Suzanne Dingwall Williams (lawyer to Canadian startups seeking funding and former VC). While it is interesting to note that many recent tech startups in Waterloo have been get off the ground without outside investment, signaling an evolution in the type of businesses that are coming out of places like Waterloo. However, there will still continue to be startups that are more capital intensive and will require outside investment, be it from Canadian or US sources.

I think we can say that the VC industry in Canada, and specifically in Ontario, is suffering from a prolonged hangover from the tech bubble meltdown. The industry has never really gotten back on its feet after the fat days ended, and this has opened the door for increasing competition from American investment dollars. The lack of Canadian funding available to young businesses, or "made in Canada" solutions has threatened the proliferation of a new generation of industry. This is coming home to roost right now in Ontario in particular, with our manufacturing economy at its death knell as a result of the high dollar and and outsourcing of jobs.

Back in February, I wrote an open letter to the members of the Social Investment Organization because I felt that these are the types of business leaders who have the means to affect positive change to Ontario's startup community. It is obvious at this point that we cannot rely on our elected officials to implement policy that will continue to help build innovative companies. And while the SIO and its members do not necessarily focus on startup ventures, or have a mandate to support innovation in Ontario, I thought it was worthwhile to bring to their attention the need for action on this front. If anything, I was trying to get some support to bolster the marketability of Canadian VC and the innovative companies they want to fund.

Suzanne Dingwall Williams got it right when she wrote:

If Canadian innovation is to scale, there needs to be a call to action for all participants in the ecosystem. This is a marketing exercise that needs to be led by you, the VCs. When was the last time you went to a bootcamp? Provided sponsorship dollars to entrepreneur-generated initiatives? Extended your channels in the US to provide a broader network for your portfolio? Many of these events are not immediately accretive to you, but they are vital to community creation. Let me re-phrase that; there has never been a more vital startup community, but it is one being fostered largely without VC involvement. This must not continue.

Well Suzanne and Gary, I sincerely hope I run into you at one of these events in order to further discuss the ongoing challenges and triumphs of Canadian startups and the VC's that want to fund them. Can anyone actually think of a really good event to mark on my calendar where this sort of debate with like minded thinkers is most likely to take place???