All this data point to the same conclusions: seed rounds are smaller, and large seed rounds much less likely, in Canada than the US .
Why does this matter? Seed round size is relevant because there is a correlation between large rounds and subsequent success. Whilst some element of this is due to a ‘common cause’ (i.e. quality firms are more likely to raise seed large funds, and large subsequent rounds), it is also the case that increased funding boosts access to critical resources, which speeds up development, supports commercialization and strengthens ecosystem maturity. Moreover, international data shows that ecosystems with larger round sizes, such as Tel Aviv, tend to show stronger growth and higher success rates. Quality selection also plays a key role: top investors back the best startups with larger checks and higher valuations, knowing there is a causal link between bigger rounds and improved outcomes. This is illustrated in figure 14 below. It shows that, in every ecosystem, startups that raised large Seed rounds (>$1M USD) are 3-4x more likely to raise Series B than startups which only raised small seed rounds (<$1M USD).
Figure 14: Success Rates to Series B for Seed-Funded Startups, based on Seed Round Size
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