While 2021 broke every record in fundraising and startup valuations, it has become clear that the boom period was short-lived. Coupled with geopolitical tensions, rising interest rates, and inflation, funding for startups in Canada and beyond has dried up, leaving some to make layoffs or close up shop.
Given all these ups and downs across the board, Canadian founders are still finding it easier (and faster) to secure capital from the United States (US). According to Antler’s director of growth and portfolio Shambhavi Mishra, this trend is among several taboo topics early-stage founders have raised at Startupfest this year, asking Canadian VCs to accelerate their speed in investing.
“I sometimes feel like Canada needs to up [its] risk-taking ability.”
Echoing RBCx Capital’s vice president Sue Umapathy, Mishra confirmed potential investors are spending more time on due diligence than in the past. Mishra’s argument, however, is that: “We need to continue betting and continue taking more risks.”
“I’ve dealt with investors in the US and in various parts of the world. I sometimes feel like Canada needs to up [its] risk-taking ability,” Mishra said, who previously worked for India-based Brand Capital and helped to expand that firm into Canada in 2019.
While fundraising conditions have become more difficult for early-stage founders, Mishra pointed out the added barriers that underrepresented entrepreneurs continue to face.
“I think diversity, equity, and inclusion (DEI) has–in the midst of this chaos that we’re all going through–has taken a slight backseat,” Mishra said. “In this current macroeconomic environment, a lot of underrepresented founders don’t [have] natural access to networks, to VCs, to circles.Those are the founders that need a lot of support.”
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“We should stop thinking of just considering [DEI] as a metric, but also see what actions the Canadian VC community can take to support some of these founders and make sure that innovation continues to happen,” Mishra added.
In her full conversation with BetaKit, Mishra discussed the need for LPs to put pressure on DEI reporting, this “period of correction” in venture funding and what it taught VCs in terms of active portfolio management.
Featured image courtesy Shambhavi Mishra’s LinkedIn.