Canada's Capital Markets Need a New Lens for the Modern Economy
The most important lesson from the SpaceX moment is not about financial injustice but where value truly resides in the modern economy. The fastest-compounding assets today are not oil, real estate, or factories—they are intellectual property, built on imagining what does not yet exist, protecting it, and building an enterprise around it. The future belongs to those who stop seeing the present as the ceiling.
Canadian Lenders Lag Behind in Funding Intellectual Property
Canada's investment culture has been slow to absorb this insight. Unlike American lenders willing to stake a future trip to Mars, Canadian lenders remain more comfortable lending against a warehouse or funding physical resource extraction rather than intellectual development. This systematically starves founders building important new companies of growth capital at the moment their assets are most valuable.
Foreign investors see the opportunity, and Canadian founders often have no choice but to look south for funding. Our domestic investment community has not updated its lens for the economy it operates in. As a country, we need to shift from envy to opportunity—not by pouring taxpayers' money into new-economy companies, but by recognizing that world-class ideas in AI, health technology, clean energy, and data platforms are not charity cases. They are long-term assets systematically undervalued in Canadian capital markets.
The Scale-Up Gap: Where Canada Falls Short
The problem is not at the startup stage. Companies needing greater support are at the scale-up stage—firms with $10 million to $100 million in revenue, too large for startup programs and too asset-light for traditional bank lending. Private finance must step up and take a risk.
Adam Froman, author of the article, writes from experience. Over 25 years, he built two technology companies in Canada—AskingCanadians and Methodify—without venture capital. But in 2021, after reaching a certain size, he sold both to a U.S. buyer because no comparable Canadian alternative existed to enable scaling. The intellectual property left, the compounding value left, and many jobs eventually followed the capital. "I did well. But in a big way, I feel that Canada deserved better," Froman said.
Canadian Patents Increasingly Transferred Abroad
Froman is not alone. Between 1998 and 2017, the share of Canadian patents transferred to foreign entities climbed from 18% to 45%, and it has only accelerated since then. This drain of intellectual property and value underscores the urgent need for Canadian capital markets to evolve and support homegrown innovation before it leaves the country.
