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Comment by cryptoz | Hacker News Reader

> What Canada doesn’t have is a strong venture capital pool, a culture of risk taking

I tried to raise a ~$300k seed round in Toronto in 2014. Most Canadian investors we met with wanted to see us have something like $10k/month in recurring revenue before considering an investment. We spent a week in SF and left with a $250k offer at a $4M valuation, when we were pre-revenue!

(We declined, and eventually our business failed (acquhired by a team in SF, though....). But still. Wow! What a difference!)

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I haven’t seen any other country that tries new things and willing to spent than the US. That includes Europe and Asia. It’s quite disappointing really because the world is so much bigger than the US alone.

>I haven’t seen any other country that tries new things and willing to spent than the US

The US owns the money printer to the world trade currency (USD), and has the military force to defend this unique position, so of course it can afford to outspend everyone else.

That may be relevant to the US government, but the investors that would invest in startups don't have access to that printer.

VC firms, investment banks, etc. are all suckling from the same FED teat, and all this cash trickles down into the US tech sector/start-up scene.

Not really. VC are investing institutional money. Institutions in the US are willing to invest in "private-equity venture capital". Hell, even CALPERS does.

It has nothing to do with the federal reserve and everything to do with risk tolerence.

I wish the legions who, in online discussions of the US dollar (or almost anything US foreign policy/military-related), always bring up how the US dollar/economy's strength is based on the "petrodollar" (you didn't say it, but that's what you were thinking of), how the US goes to war to preserve the dollar's role as a reserve currency, how Russia/China/Saudi Arabia can cause the dollar to crash by using another currency, etc., would actually think about what they're arguing about.

No, kids, if Saudi Arabia suddenly started selling all its oil in Euros or Yen on renminbi, the US would not send the Sixth Fleet off its shore, any more than it did so to force KSA to use the US dollar to price its wares in the first place. Saudis (and Russians, and Chinese, and everyone else) use the US dollar because they find that a) using it is more convenient than another hard currency like the Swiss franc or British pound, and b) no one else wants riyals, rubles, or renminbi.

This is not necessarily some petro-dollar argument. Individuals in other countries and their central banks want to save or hold USD in reserve for a variety of reasons (local currency inflation, exchange rates, etc). They buy dollar denominated bonds. This essentially allows the US massive access to credit which can fund these sorts of ventures.

I can make the same argument without mentioning the military - we benefit from a virtuous cycle of having the most dynamic economy which allows us access to credit to improve it, making it even more dynamic, and we simply pay it back as a lesser share of % GDP later.

No kidding

The Canadian risk/reward curve is weird. They won't look at anything barely promising but will go "all in" once it hits a bit of traction (even if the business model is wonky)

So after all they were right and didn't lose ~$300k?

I dunno about that. Most of the team was "very Canadian" and didn't want to move to California - the main reason we rejected the SF deal (I was the only one who accepted in full the acquihire, the team did not move in the end). $300k, staying in Canada, would have gone a long way to providing a stronger team cohesion at the time. Maybe we would have succeeded.

Also, we were near completing a $10k/month enterprise deal but didn't have the runway to finish those sales in time. Additionally, we had Government of Canada contracts at $3k/month in the pipeline, which we did eventually complete. Our software was running on millions of phones, we had enterprise pipeline deals, signed government contracts (hard to come by I hear!) and a darn good team.

Hard to say how it would have played out, but, what's clear to me is that it wasn't clear that the $300k would have been lost.

Thanks for the context! It actually seems like something worth taking the risk, too bad it didn't played out better

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