Only 32.4% of Canadian-led “high-potential” startups launched kept their headquarters in Canada in 2024, down from more than 67% during 2015–2019, according to a new Leaders Fund survey of 2,932 companies over a decade.
The US absorbed nearly half of the number—almost double the share seen in the 2019 cohort—while Canada’s presence shrank. Leaders Fund also found that US-based, Canadian-led startups consistently out-raised peers anchored in Canada.
Canada’s global share of new high-potential startups among four regions (Canada, US, EU, Israel) collapsed from 4.8% (2018) to 1.5% (2024). The US produced 45× as many high-potential startups as Canada in 2024, more than triple the relative gap seen during 2015–2020.
Deal flow inside the Canadian venture ecosystem has followed the shift. Leaders Fund says 70% of its financings now occur in the US and Israel, versus mostly Canada previously.
“What is indisputable is that after 2020, virtually every single one of these metrics start to deteriorate in Canada, while in other ecosystems, that is not necessarily the case,” said managing partner Gideon Hayden.
Gumloop—an AI workflow-automation startup with customers including Instacart and Shopify—raised $17 million in 2024 and moved its HQ from Vancouver to San Francisco after completing Y Combinator.
Veteran investors frame the moment bluntly, as the pattern seems to have emanated from other industries like in oil, gas, and mining where there is a steady departure of top talent and headquarters.
Canada’s founders felt “a low-water mark for startup entrepreneurs’ confidence” when Ottawa proposed higher capital-gains taxes (later cancelled), said Benjamin Bergen of the Council of Canadian Innovators, while the US this year lifted founders’ capital-gains exemption to US$15 million.
Some entrepreneurs are moving because of speed and scale. Aalo Atomics founder Matt Loszak relocated to Texas, raised US$136 million, and secured Department of Energy approval to build a power plant.
“We wouldn’t have been able to raise $136-million so quickly in Canada,” he said.
Asepha co-founder Can Uncu received a US O-1 visa in 13 days after being told Canada’s startup-visa process would take three years: “I love Toronto, but I also want to make the best of my talent.”
Leaders in Canada’s ecosystem say they’re fighting back. Barn VC plans $50,000 cheques for 50 early founders in Waterloo, Simple Ventures raised $15 million from corporate backers including TD Bank and Sun Life to create 10 companies, and Shopify runs weekly “Builder Sunday” sessions in Montreal and Toronto, which president Harley Finkelstein says draw “hundreds of entrepreneurs… planning to build their companies in Canada.”
However, the survey still highlights a challenging startup environment.
“Founders aren’t fleeing Canada, they are fleeing the friction that Canada has created,” said Lucy Hargreaves of Build Canada. “Every founder who leaves Canada is one less person creating jobs, paying taxes and building prosperity here.”
Information for this story was found via The Globe And Mail and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
