Cohere CEO Aidan Gomez said Canadian tech founders need to build their businesses at home instead of moving to the U.S.Chris Young/The Canadian Press
Technology leaders are urging the next generation of founders to resist the lure of U.S. capital and keep their businesses – and their careers – at home in Canada.
“You need to start saying no,” Cohere Inc. co-founder and CEO Aidan Gomez told a room full of founders Tuesday morning. “Refuse. Don’t do it. You’re here to build a Canadian company. We need this.”
During the conversation about the future of Canadian technology during Toronto Tech Week, Mr. Gomez and Shopify Inc. SHOP-T president Harley Finkelstein told the crowd that Canada needs to do a better job at retaining talent and companies.
“All of our little bright lights, these ambitious Canadians who want to build a global company inside of Canada, they get pulled. And so we need to take an active nationalistic stance to build for Canada,” Mr. Gomez said.
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The Cohere and Shopify executives both said their companies rejected offers of American capital in the early days.
According to Mr. Gomez, a large U.S.-based company offered to acquire Cohere, which creates artificial intelligence technology for enterprise clients, for a nine-digit price. He and co-founders Ivan Zhang and Nick Frosst strongly considered it, he said, even reaching a “board-level” decision. But ultimately, they refused – a choice he said he is now grateful for.
Cohere received up to $240-million from the federal government last year as part of Ottawa’s sovereign artificial intelligence compute program. CoreWeave Inc., a U.S. company, will be building a data centre for the company and is, in effect, the indirect recipient of the funding.
“I really feel that our country is under threat. I feel that the box of Canada’s sovereignty has been opened and it can’t be closed,” Mr. Gomez said. “We need to take an active nationalistic stance to build for Canada.”
He said that Canada’s brand has been an asset for the company, especially recently given geopolitical shifts on the global stage, but that Canadian investors would need to step up to support Canadian innovation. When asked how he and co-founders avoid continued calls, he said he tells investors the company is “not for sale.”
“Any sort of exit that would take us out of Canada is only if we fail. And we haven’t failed,” Mr. Gomez said.
He added that brain drain, not a lack of ambition, continues to be a serious threat to the Canadian innovation economy. He described working at Google as an intern, and realizing that many of the employees working on artificial intelligence were Canadian, too.
“It’s that Valley-or-bust mentality which breaks the ecosystem and really hurts Canada,” he said.
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Similarly, Mr. Finkelstein said that Shopify’s executives refused to answer calls from potential suitors in the company’s early days, and declined to take money from U.S. investors during an early funding round which would have required it to move to Silicon Valley. Eventually, he said, the company found investors who supported the company’s Canadian growth.
But the opportunities to take U.S. funding may be getting stronger, as more U.S. venture capitalists are turning their attention to Canadian startups, according to Ajay Agarwal, founder of the Creative Destruction Lab accelerator program and a professor at the Rotman School of Management at the University of Toronto.
Mr. Agarwal said there has been significant increase in foreign direct investment in early-stage Canadian companies over the last decade, particularly in seed, Series A and Series B investments. Many had never before invested in Canada, he said, and didn’t know they could.
“There’s a lot more capital flow, and competition. That means our local venture capital community now has to compete with U.S. investors,” he said at a Monday night event.
The conversations took place as part of Toronto Tech Week, which replaced the long-running single-location Collision Conference with more than 300 events across the city, hosted by companies, schools and organizations. More than 15,000 attendees have registered for events, the organizers said.
Ameet Shah, a partner with Toronto seed financier Golden Ventures and a board member for Toronto Tech Week, said the idea for the event materialized after some of the events and mixers held offsite during last year’s Collision event, driven by locals wanting to build on the momentum with a homegrown, decentralized week of events.
“We wanted something that would be authentic to the community, and city, and country,” he said.