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Toronto

As the largest, and most diverse city in Canada, roughly half of Toronto’s citizens hail from countries all over the world. This global perspective, coupled with a large pool of affordable technical talent due to strong engineering universities, offers many of the necessary ingredients to scale startups. The startup community is tight-knit and interest in entrepreneurship is on an upswing. Recent initiatives like the Digital Media Zone and the government-funded MarRS Discovery District have fueled the latest wave of entrepreneurial energy, creating important resources and foundations for future success. Still, Toronto startups do face some challenges. There’s a dearth of marketers with startup experience, which can hinder rapid growth and distribution. And local startups tend to exit early, rather than chasing the multi-billion dollar dream. This means lots of small wins, but few large wins that can rewrite an ecosystem and forge an entire wave of startup investors.

In This Market

These businesses offer industry expertise and are a source of startup talent and potential customers. They help fuel the local startup community.

Opportunities

  • Giant metropolitan area. The Greater Toronto Area (GTA) is home to 6 million people, 49% of whom are foreign born.
  • Tens of thousand of talented young people graduate every year from some of the best engineering universities in the world including: the University of Toronto, the University of Waterloo, and the University of Western Ontario.
  • Entrepreneurs are just starting to re-enter the market after their first exit, and the sense of community is palpable.
  • The past four years has seen tremendous growth in the number of people who are interested in entrepreneurship.
  • Government tax incentives, such as the Scientific Research and Experimental Development Tax Incentive Program (SR&ED), reward companies for investing in R&D.
  • Particular startup activity in the areas of advertising tech, Internet of Things, and health IT. Toronto also has legacy strengths in the media, cleantech, financial services and creative industries, and is home to the largest life sciences sector in North America.

Risk Factors

  • The ecosystem is still in its early stage, and there has not been a multi-billion dollar exit. Companies tend to exit ‘too early,’ rather than focusing on growing something sustainable.
  • Canadians have an inferiority complex, and aren’t as confident as their American counterparts.
  • The notoriously cold weather is enough to scare people to warmer climates.
  • There is a serious demand for startup-oriented marketers; the marketing staff doesn’t have much startup experience and come from more traditional industries.
  • Canadian investors have typically focused on minerals and mining companies, which attracts much of the available Canadian capital. Thus, people lean towards investing their money in mineral resources rather than tech startups, due to prevailing winds and prior expertise.
  • Congested roads makes traffic unbearable for many commuters.
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