Four leading VCs get brutally honest about fundraising in Canada’s toughest year since 2020
The numbers don’t lie. In the first half of 2025, just $300 million was deployed across 133 Canadian pre-seed and seed-stage deals, down 16% in deal value and roughly 30% in deal count year-over-year. In the broader context, this marked the slowest first half for Canadian venture activity since 2020.
But at Elevate Festival 2025, four venture capitalists got real about what’s actually happening behind the scenes. Shambhavi Mishra from Antler sat down with Prashant Matta from Panache Ventures, Mia Morissette from iNovia Capital, and Robbie Marks from Staircase Ventures to unpack the truth about raising capital right now.
The State of Canadian Fundraising in One Word
When asked to sum up 2025’s fundraising environment, these investors said:
Mia (iNovia): “Polarized. AI craziness on one side, but stories outside that wave? Still difficult to raise.”
Robbie (Staircase): “Underappreciated. We have three of the top 10 AI tech talent markets globally – Toronto, Waterloo, Vancouver – but the numbers don’t reflect it.”
Prashant (Panache): “Rebound. Startup creation has been robust since 2023. It’s just a matter of time before capital catches up.”
The US vs. Canada Question
Here’s the stat that shocked the room: 80% of Canadian VC deals in Q1 2025 involved US VCs. These deals often pushed way higher valuations than Canadian VCs would give.
Prashant’s take? “Capital will find the best talent. If Canadians aren’t going to fund our companies, somebody else will.” He pointed out that Canada’s scale-up problem actually starts at pre-seed. With only 133 deals in H1, applying 10% graduation rates means fewer than 15 companies from that cohort will have a shot at later stages.
But Mia sees change coming: “There are more Canadian funds investing in Canada now. When iNovia growth was launched seven years ago, we were the only one growth fund. Now there’s more.” She cited a Canadian Series C company that received 10 term sheets in two weeks this summer. Half came from US funds, half Canadian.
What “Good Traction” Actually Means
For Pre-Seed
Prashant (Panache) kept it simple: “It’s really about the team and thesis.”
For Seed
If you’re building in the AI app layer, the bar is high. Prashant just returned from Silicon Valley with this reality check: “If you’re not going from zero to three to twelve million in annual revenue, it’s going to be hard because that’s where the market is today.”
Infrastructure layer? You get some flexibility on growth, but you still need to prove your economics can compound.
For Series B+
Mia (iNovia) shared three things that have changed:
- Articulating where you fit in the AI world. Even non-AI companies need an AI story.
- Efficiency metrics. Burn multiple and magic ratios matter more than ever.
- Retention deep-dive. Net dollar retention isn’t enough anymore. VCs are digging into churn patterns, especially in PLG models.
Is the “triple, triple, double, double” formula dead? “That formula was not true anymore for the past two years,” Mia said, “but it’s starting to be back.”
How to Run a Disciplined Fundraising Process
Robbie (Staircase) dropped the framework that matters: “You want to show investors insane conviction. It’s going to happen whether or not that investor’s going to invest. You’re giving them the opportunity to come in and help you grow.”
His advice was clear: Set up first meetings with all potential investors in the same few-day window. Line up second meetings in the same few-day window. Create genuine scarcity by saying, “We’re already discussing this with several investors; we’ve got lots of second meetings lined up.”
“If you’re going one investor at a time over six months,” Robbie warned, “you’re never going to create that structure to raise a successful round.”
Mia (iNovia) challenged the pure speed narrative: “We’re not able to take a decision in a matter of days if we’ve never heard about this company before. Once we know the founder, we’ve built trust, then we can actually move fast.”
Her recommendation: identify your top 5 to 10 true potential partners and start building relationships 6 to 12 months before you need to raise. “This is a 10-year relationship. Will the highest term sheet in a two-week process get you the best partner?”
The AI Reality Check
Since 2023, nearly half of VC dollars have gone to AI companies. If you’re not building core AI, what do you do?
All three investors agreed: You need an AI story, even if you’re not AI-first.
“What’s your defensibility in this new world?” Mia asked. “If you’re a vertical SaaS or system of record without an AI strategy on the customer product roadmap, or how you’re changing internal processes, it’s going to be difficult to raise.”
Robbie compared it to the cloud revolution: “AI is the new infrastructure of technology. Imagine trying to fund a company that wasn’t using cloud when cloud came in.”
On app-layer defensibility, Prashant was blunt. “It’s nothing defensible at the app layer in my experience.” The winners? Vertically focused founders who know their domain and distribution cold. “You can distribute faster than most of your competitors, but the assumption is everybody’s building on the same technology stack.”
The One Piece of Advice
As the panel wrapped, each VC shared a final piece of wisdom.
Mia: “Hustle, agility. We’re looking for hustlers that are going to figure it out no matter what.”
Robbie: “You don’t have to raise venture capital to be a successful entrepreneur. Understand what it means for your business. It’s not right for every business.”
Prashant: “Think global, not Canada first, not America first. We’re at a point where you can build anywhere and sell anywhere.”
Shambhavi (moderator) added: “Understand your ICP. Understand how VC math works. Then you’ll understand the incentives behind all those tough questions.”
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Join us at CIX Summit 2026, in order to connect with fellow startup founders, investors looking for deal flow, and advisors who have been on the journey before.
CIX, powered by Elevate, is Canada’s largest startup awards program that brings together Canada’s most promising tech founders, global investors, and industry advisors to power new deals. Buy tickets at the Early Bird price before February 26, 2026: https://cixsummit.com/tickets/
