annum. These gaps exist beyond the current support (e.g. VCCI). There are also disparities in time to raise, which will be particularly important if Canada is to take advantage of the AI transformation. We suggest that the immediate priority should be to increase ● the size of seed rounds (especially bigger rounds to top startups); ● then their number (i.e. more smaller rounds); ● then their speed (i.e. faster fund-raising) In ecosystems outside Toronto-Waterloo, as the total seed funding expands, Series A should also expand proportionately (so as to maintain their approximate current ratio); however, given the typical ~18 month lag between Seed rounds and Series A, Seed funding should be the priority of new capital injection, followed by Series A one year later. 5.3. Adapting to the AI transformation As mentioned, AI is very clearly the stand-out growth sector of recent years, and in our opinion is a true general purpose technology which will continue to be a major driver of growth for the foreseeable future. The data suggests that, at present, Canada is failing to maximise its potential here: the same problems exist as for other sectors, but are exacerbated. And thus the recommendations of this report are even more pressing. It is notable that US investors are investing significantly larger sums into AI, and doing so more quickly, than in other sectors. We suggest that this is because US investors recognise that speed is very important for AI startups, and also have had experience in working with AI. In contrast, Canadian angels and VCs appear more cautious about AI. Whilst it is understandable that investors are concerned about investing larger sums, more quickly, into a technology sector with very different
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