If you’re an entrepreneur struggling to raise money from your local investor community, and you’re complaining about it or using it as an excuse, stop. Just stop. And strongly consider getting a job.
An article I wrote last week about why you should choose Canada over Silicon Valley reached the number three slot on Hackernews and earned me an inbox full of challenging comments. That article, just like this one, uses Canada as an example—but I believe the argument holds true for any startup community outside of "the Valley" (I really hate using that term).
Many of the comments I received were complaints about Canadian investors and the difficulty raising money from them. Entrepreneurs seem to be blaming local VC (Canadian VCs in this case) for their companies struggles.
I don’t want to discuss the quality or quantity of Canadian investors; that’s another debate. Instead I want to reiterate the fact that the capital market is global. Money flows seamlessly across the border as investors in Canada and the US chase the best deals regardless of the zip or postal code listed on the founders business card.
Complaining that you can’t raise money from Canadian investors is like complaining that you can’t get Canadians to buy your junk on Ebay.
There has never been a better time to raise money as a Canadian entrepreneur. Ever. And there may never be a time like this again.
1. Software is still eating the world.
Even though there seems to be an app for everything, mobile, social, artificial intelligence, and enterprise adoption are still at a relatively early stage. There’s no shortage of opportunity to build disruptive products. And investors know this.
2. Valley investors have an appetite for outside investment.
There’s simply more money than deals in the Valley right now. The amazing developers and designers that call the Bay Area home have been spread paper thin because of the influx of seed capital (insert argument for US Immigration reform here).
Given two companies an investor feels have an equal chance of becoming worth $1 billion, they’ll take the local one. But the fierce competition for deals and the dilution of talent means that many investors are actively seeking outside investment. Sure, there’s a few who only invest locally, but there’s many more that embrace outside investment. Dave Mcclure and our former investors at Tandem Entrepreneurs—just to name a few—actively seek outside the Valley.
3. It’s easy for foreign investors to invest in Canada.
The 2010 removal of Section 116 in Canadian tax law makes it easy for anyone to invest in Canada.
At the risk of sounding like an old grump, if you’re complaining about how hard it is to raise money from local investors, talk to an entrepreneur who tried five years ago before tax laws were reformed; before Extreme Startups, GrowLab, and Founder Fuel were accelerating startups; and before firms like iNovia, Omers and Real Ventures were funding Canadian startups at the rate they are today.
This doesn’t even include startup organizations like Startup Edmonton, Accelerate Okanagan and the C100, who are now helping connect startups to capital. Also, this seed stage bubble boom? It won’t last forever. Be thankful you’re raising money now.
Instead of complaining, build an awesome product and team, read Michael Silverwood’s guide to Angelist, put together a reasonable argument as to how you’re going to grow a massive company (massive doesn’t mean $10 million or even $100 million in revenue per year), and reach out to as many investors as humanly possible. Hacking email addresses is easy and you’ll be surprised how many people respond.
Once you do that, instead of excuses, you’ll have an investment.