Jesse Wiebe, shown along the South Saskatchewan River in Saskatoon, is launching the Canadian Startup Capital Association, which has come up with a rival proposal for a $750-million funding commitment by the federal government.Liam Richards/The Globe and Mail
As Canada’s national angel investor and venture capital advocacy groups battle over how to spend $750-million of federal innovation funding, a third organization representing early-stage financiers has formed and presented its own proposal to distribute the government’s money.
On Wednesday, Saskatoon-based angel investor Jesse Wiebe launched the Canadian Startup Capital Association, composed of more than 19 angel syndicates and small fund managers, including Startup TNT – where he serves as community development lead – Anges Québec, Antler Canada and the Firehood. The group represents 3,500-plus investors, he said in an interview.
The CSCA is entering a space served by the National Angel Capital Organization, or NACO, which represents 4,000 angel investors and 100 early-stage investing organizations, and the Canadian Venture Capital and Private Equity Association, or CVCA, whose members are later-stage private capital investment firms.
The CSCA aims to represent investors ranging from angels – individuals that back nascent startups – to small seed and venture capital firms that fund more advanced companies. Other members include Indigenous Venture Challenge and Capital M Ventures, which back startups led by Indigenous and Black female founders, respectively.
Mr. Wiebe said he decided to form the CSCA after government sources said “they were interested in speaking directly with the most active and on-the-ground entities doing the real work” of deploying and finding capital for startups.
“The thinking was, ‘Well, we’re the ones doing the work, we should be the ones talking directly to government rather than having another organization speak for us that we don’t always agree with.’”
The fall 2025 budget pledged $1.75-billion to spur on Canada’s innovation sector. Of that, $1-billion is earmarked for the fourth iteration of a program dating to the early 2010s, now called the Venture and Growth Capital Catalyst Initiative, or VGCCI. It will bankroll a fund-of-funds that would back venture capital funds and incentivize pension funds and other institutional investors to participate. The other $750-million is for a new strategy “to support Canadian firms facing early growth-stage funding gaps,” the budget stated.
NACO and CVCA read that mandate differently. “Growth” capital typically refers to funds raised by more seasoned companies that have proven market demand and generate millions of dollars in revenue. But the word “early” combined with “growth” leaves it open to interpretation.
CVCA argues there is a structural gap in Canada’s ability to support scaled-up “champion” companies, which results in foreign sources predominantly funding later-stage financings. It proposes that Ottawa spend the $750-million on new and existing Canadian fund managers to invest in those later-stage rounds.
CVCA chief executive officer Benjamin Bergen said in an interview if most late-stage capital is foreign, “that ultimately plays into challenges around creating wealth, prosperity and sovereignty” in Canada. Facilitating more capital deployment from within Canada would “keep more of that upside here,” he said. “That is what the $750-million is meant to address.”
NACO argues the bigger problem is at the earlier stages. Fledgling startups are chronically underfunded while later-stage companies are well-served by VGCCI and its predecessor programs, it argues. The remaining $750-million should therefore focus on where the funding gap is greatest – at the earliest stages, according to NACO-commissioned data – said its CEO, Claudio Rojas.
NACO proposes Ottawa use $500-million for a matching-fund program for investments made by early-stage financiers. It is also asking for $250-million over five years to fund “operational infrastructure” to help “stabilize and professionalize” early-stage investors.
Government officials have met with NACO and CVCA, and appear to favour spending most of the $750-million on later-stage funding – while splitting off less than $100-million for earlier stage investors, a source familiar with the government’s thinking said. The Globe and Mail is not identifying the source as they are not authorized to discuss the matter.
Like NACO, Mr. Wiebe’s group believes young companies are underfunded at the earliest stages. But he doesn’t think the problem is a lack of capital, founders or investors. Rather, he said Canada needs stronger networks to connect investors with each other and with startups, supported by more modestly funded infrastructure than what NACO envisions.
Mr. Wiebe is one of Canada’s most active angel investors; he’s convinced hundreds of others to become angels and built programs for Startup TNT, one of Canada’s most active private investment firms by deal count. He pulled out of NACO last fall, feeling it wasn’t as responsive or helpful to underrepresented regions or investor groups as it could be.
He believes there is significant wealth in Canada, particularly as younger individuals inherit family fortunes, and that educating and connecting funders to founders will have significant impact.
Mr. Wiebe’s CSCA is asking for $75-million to $150-million from the government – one-third for program funding to activate capital providers, educate and connect them, and two-thirds for a fund-of-funds that would provide up to $2.5-million apiece to early-stage fund managers. “We feel at this time in the early stage that there are still a lot of holes in the bucket,” he said. “We need to spend more time plugging the holes and less time filling the bucket with more water.”
Richard Tuck, who has built support programs for Indigenous entrepreneurs including Indigenous Venture Challenge, said he joined CSCA because he feels the other proposals are “Band-Aid solutions” that don’t get to the root of endemic problems, For example, he said Canadian angel investors often drag out investing processes for months, while similar deals take weeks in the U.S. That “actively harms startups,” he said.
Capital M founding partner Melissa Allen said CSCA’s appeal is that it addresses a gap in the early-stage funding market that is “being overlooked by these different organizations.”
Marc-Antoine Cantin, CEO of Anges Québec, which represents 170 angels, said his members want to invest across the country, “but who do I work with to put a $1-million cheque in a startup with somebody from Alberta or Saskatchewan or B.C.? I don’t know these angel groups. If we can connect with them, we can do deals together and have significantly more capital to invest in startups across Canada.”