Toronto: Growing a Great Startup Ecosystem

Yesterday evening, Allen Lau from Wattpad helped me organize a small casual dinner with other entrepreneurs and investors in Toronto. We have three existing investments in Toronto: Wattpad and Figure 1 in the city and Kik in Waterloo. Toronto has all the makings of a great ecosystem for tech startups and I am sure over time we will be finding more exciting companies here:

1. There are schools with excellent engineering programs, including the world renowned Waterloo and University of Toronto (the latter was until recently the home of Geoffrey Hinton who pioneered deep learning).

2. There have been some big exits, including of course Blackberry (despite is later struggles) and more recently the spectacular IPO Shopify, as well as a many midsize exits, such as the acquisition of Kobo by Rakuten for $315 million. Exits provide both liquidity to local investors and create a base of angel investors.

3. There is a terrific entrepreneurial network in which more experienced second and third time entrepreneurs help each other as well as first-time entrepreneurs who are just getting going.

4. The cost of talent is still affordable and people are loyal to their companies, which provides resiliency when startups hit the inevitable rough patch. Quite a few people have done a stint on the US West Coast working in tech there.

5. There is more and more capital available at all stages. At the seed level there are local firms such as Golden Venture Partners, Real Ventures has an office here now, and Version One has made investments. There are accelerators such as OneEleven. There is Omers with its deep pools of capital. And US venture firms have been active, including many of the top names.

As a New Yorker all of this is particularly exciting because Toronto is just a short distance away and has a similar feel. I am looking forward to spending more time here and having more dinners like the one last night. Thanks Allen for organizing and thanks to everyone who came for a terrific discussion.