TL;DR: Starting a tech company in Toronto instead of Silicon Valley costs you real money, connections, and easy access to specialized talent. That tax has been falling for almost three decades, and the founders who get hurt are the ones who don’t know they’re paying it.

I started my company in Toronto twenty-eight years ago. Back then I had a theory that turned out to be mostly right, and is still partly right today. Where you start a company is a handicap, and starting it here instead of in Silicon Valley costs you something real.

I want to be careful with that word. A handicap is not a wall. It is a tax. You can still build a great company in Toronto, and plenty of people have. But you pay for the privilege of being here, in time and money and missed connections, in ways a founder in Mountain View never thinks about. The first step to beating the tax is admitting you are paying it.

Here is what the tax looked like for me, and what it still looks like for the founders I talk to now.

Your professionals don’t know your world

When I started, my accountant, my lawyer, and my banker were all good at their jobs. None of them had ever worked with a technology company. They had no background in it, no instinct for it, and no relationships in venture capital or private equity. When I asked them questions, they gave me answers that were correct for a builder or a manufacturer and quietly wrong for a tech startup.

That is the most dangerous handicap on this list, because it does not feel like one. Bad advice from a confident professional looks exactly like good advice. In the Valley your lawyer has papered fifty seed rounds and will tell you which terms are market and which are a trap. Here you can spend years taking sensible, conservative, locally normal advice that slowly steers your company in the wrong direction, and never notice it happening.

The money is thin

This is the real wall, and the numbers are not close. In 2024, startups in the San Francisco Bay Area raised about ninety billion dollars in venture capital, more than half of all the venture money in the United States, according to Crunchbase. The entire country of Canada raised roughly eight billion Canadian dollars in the same year. One region out-raised my whole country by something close to ten to one.

And it got tighter, not looser. The CVCA reported that early in 2025 Canadian deal count fell to a five-year low, with seed and pre-seed activity especially weak. Founders here lean on American investors to scale, which means the money is out there but it lives somewhere else and you have to go and get it.

So the pool of angels and venture capital you can reach without a plane ticket is small. That was true twenty-eight years ago and it is still true today.

Nobody is in the room

In San Francisco it is a normal Tuesday to have five different meetups running at once, full of people writing code while someone pitches a new tool. Conferences roll through constantly, and even if you skip the conference you meet half the people who flew in for it. The serendipity is built into the city.

Here you are lucky to find one decent meetup a week, and half of them charge at the door and turn into a social night with drinks rather than a room full of people building. If you have money and you want to meet a technical founder, that is hard. If you are a technical founder and you want to meet someone with money, that is also hard.

Mentorship is the same story. A mentor who has actually built and sold a technology company, who has raised real rounds and survived the parts nobody writes about, is rare here. In the Valley you trip over them. Here you have to hunt.

The part nobody likes to say

The people who get really, really good leave. I have watched it happen for almost three decades. Toronto grows world-class talent and ships a lot of it south, because the gravity down there is stronger than anything we can offer at the very top end. I will come back to that in the next piece, because it is the handicap everyone fixates on and, oddly, the one that is about to matter least.

So why build a tech company in Toronto anyway?

Because the tax has been falling for twenty-eight years, and because being handicapped is not the same as being out of the game.

The talent is already here

Start with talent. This is no longer a weakness. In CBRE’s 2025 ranking, Toronto is the third-largest tech talent market in North America, behind only the Bay Area and Seattle, and ahead of New York and Austin. The city has the fourth-largest pool of AI workers on the continent, around twenty-four thousand of them, and the University of Toronto and Waterloo run two of the best computer science programs anywhere. The engineers are here. That old complaint is dead.

Scarce money is disciplined money

Then there is the thing scarcity gives you that abundance never does. Money you cannot raise easily is money you cannot waste. A two million dollar round funds twenty-four to thirty months in Toronto and barely twelve to eighteen in San Francisco. Add the SR&ED credits and the lower cost of nearly everything, and your runway roughly doubles.

You learn to build a real business with real revenue because you have no other option, while your overfunded competitor learns to build a bigger pitch deck. When the market turns, discipline beats a war chest more often than people expect.

Your handicap is relative

The handicap is relative. I am handicapped compared to a founder in the Valley. I am enormously advantaged compared to a founder in most of the world, where there is no capital, no talent pool, no ranking, and no exit in sight. There are maybe two or three places on Earth that are not handicapped in some way. Everyone else is somewhere on the curve, and Toronto sits a lot closer to the top of it than the bottom.

Name your handicaps, then pay them down on purpose

So here is the whole point. Name your handicaps. Write them down. The founder who gets hurt is not the one with the handicap, it is the one who does not know he has it and takes his banker’s advice as gospel.

Once you can see the tax, you can pay it down on purpose. Travel for the network you cannot grow at home. Find your mentors online. Raise outside your postal code. The geography only wins if you let it set your defaults.

I have been paying this tax for twenty-eight years. It is lower now than it has ever been. And the one piece of it that still feels permanent, the genius who packs up and moves to California, is the one I am least worried about. That is the next article.