Let’s get this party started

Glider with maple leaf, going downBy Mark Evans

South of the border, the party is raging. You can almost hear Prince’s “1999″ playing in the background as startups find themselves being courted by investors and snapped up for eye-popping amounts.

The current case in point is Facebook’s $1-billion purchase of Instagram, which is staggering any way you want to slice it. To me, it feels frothy and eerily similar to the dot-com boom of 1999/2000. Meanwhile, Jason Freedman, founder of 42Floors, writes about how investors at a Y Combinator demo day were “frenzied almost, excited to invest in entrepreneurs.”

But while there seem to be signs the market is becoming increasingly over-heated, you also have wonder whether it matters. If the party is happening and everyone is having a great time, does it make sense to be a party-pooper? Maybe it is just better to jump into the fray and enjoy the ride.

It’s a strange world. While the startup scene in the U.S. is flourishing, the Canadian startup ecosystem is far from robust. There still isn’t enough capital, many institutional investors are still not participating, and many startups find getting financing difficult, if not impossible, to attract.

This despite the fact the startup ecosystem is as vibrant and strong as it’s ever been, and that dozens of startups were acquired last year. In other words, there’s a lot to be excited about, but while Canada is hosting a small tea party, a wild rave is underway in the U.S.

When you compare the two “parties,” the key question is: Are Canadian startups missing the boat? Is our conservatism and aversion to risk damaging the development of the startup sector and hurting Canada’s ability to drive innovation and economic growth? When the federal government has to commit $50o-million to support venture capital activities, it’s an admission that something is not right.

Some more key questions: Is Canada’s startup scene simply not robust enough, or are things getting out of control in the U.S.? Are we right, and they’re wrong? Or are we missing out on a good party?

What do you think?

More: Anyone interested in the Canadian startup landscape should read Jevon MacDonald’s post on StartupNorth.

First published on markevanstech.com

Comments

  1. says

    RE: that “small tea party” up here in Canuckland, Mark….that’s about the size of it….but I do look forward to watching that party gro to be a full-blown RAVE in the next few years too!

    And IMHO, a large part of that is the 270 day window that the US SEC now has to grant full crowdfunding specs to the US investment world….and I wonder how we Canucks will respond too!

    Hopefully, we’ll take the best of that model and Canadianize it for our own startups….

    :-)

    Jim

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