3.1 Access to Capital: Follow the Entrepreneurs ● Availability of Capital : Canadian founders face a significant shortfall in early-stage capital, limiting their runway and competitiveness. ● Pathways to Capital : Funding is highly centralized and fragmented, making it difficult for entrepreneurs outside major hubs or without established networks to connect with capital providers. ● Time to Capital : Delays in capital access misalign with the timing needs of startups, especially in capital-intensive sectors. This also applies to emerging and established VC fund managers, who face long fundraising cycles and limited institutional participation. 3.2 Lifecycle of Capital: Follow the Investments Figure 2: Lifecycle of Capital Framework. This diagram illustrates the interplay between the supply, deployment, and momentum of capital reinvested back into new early-stage investments when capital is returned to investors and entrepreneurs.
● Supply of Capital : There is untapped potential in mobilizing private wealth, family offices, and institutional allocators toward early-stage innovation. A National Investment Tax Credit can unlock this dormant supply. ● Deployment of Capital : Programs like VCCI and VCAP, along with targeted angel supports, channel capital effectively into high-growth firms. Strengthening the supply side makes these deployment tools more impactful. ● Momentum of Capital : Liquidity events and capital recycling are essential. Policies that support secondaries and reinvestment—like capital gains reinvestment deferrals—can reinforce the investment cycle.
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