Best coast blues...

The latest PitchBook Global VC Ecosystem Rankings delivered a sobering reality check for Vancouver’s startup community. The city ranked 77th globally, trailing behind Canadian peers like Calgary, Ottawa, Toronto, and Montreal. I shared brief notes about the news on LinkedIn, which generated 13,000 impressions and 60 comments. Here’s a snapshot of what my network said, which reflects a diverse spectrum of views, a collection of challenges, common frustrations and observations–but also, calls (and reasons) for hope.

Exits matter, but is that enough?

Chang Han, an experienced startup advisor, made a crucial observation: “While there are many, many different factors at play—both locally and abroad—that weave together into a complex causal source, I believe there is one thing that is the single most important (currently missing) catalyst. Exits. Whether big or small, too early or very late, exits = capital and talent looking for new entrepreneurial endeavours.”

This is something Vancouver lacks—a regular cycle of successful exits that recycle capital back into the ecosystem. Without exits, money and talent stagnate, move elsewhere, and prevent the next generation of entrepreneurs from taking off. Chang adds, “Whether big or small, too early or very late, exits = capital and talent looking for new entrepreneurial endeavours.”

Yet, not everyone agrees that exits are the only solution. Graham Truax countered with a different perspective, calling the focus on exits a “vanity metric.” He argues that “BC’s ecosystem is falling further and further into the vanity metrics trap… We have a dated belief that optics and activities will yield investable outcomes vs. the much harder effort to create solid fundamentals, [chiefly revenue].” For Truax, the real challenge lies in building sustainable businesses that attract serious investors, rather than chasing quick exits that look good on paper but don’t drive long-term growth.

A cultural gap in networking

One of the more striking points raised was by Anna Jacobson, who moved to Vancouver from California. She highlights a key cultural difference in networking: “In the U.S., especially in venture, there’s an understanding that you should try to meet as many people as possible. Here, my experience has been that people just aren’t interested in talking to a stranger unless there’s a well-defined reason.”

This isolationist approach may be contributing to Vancouver’s slower growth—without robust, opportunistic networking, founders miss out on essential connections that can lead to investment or partnerships. Jacobson’s reflection suggests that BC’s startup community may be inadvertently limiting itself by failing to foster a culture of openness and relationship-building.

The risk-averse ecosystem

Another common frustration echoed by many commenters is the risk aversion that seems to permeate Vancouver’s startup ecosystem. John Can Karayel remarked that “Vancouver’s entire startup ecosystem, not just VC, needs a serious shake-up. We’ve got the talent, but the same old faces and risk-averse attitudes across the board are holding it back.”

This critique is reinforced by Dan Burgar, who points to the glaring lack of early-stage risk capital. He draws a sharp comparison between BC and Alberta, where government-backed innovation programs receive significantly more funding. “Alberta Innovates receives $250 million per year to support their ecosystem. Innovate BC only receives $5-6 million. That should explain quite a lot,” Burgar explains. The funding gap illustrates the stark difference in government commitment to fostering innovation.

Adding to the conversation, Daniel Saraolu, who has spent the past decade building a global network of business incubators, reflects on the stagnation in BC’s ecosystem: “We see the same faces, the same panels, almost from one event to another. BC needs new blood, in my opinion.” For Saraolu, Vancouver's ecosystem suffers from a lack of diversity in leadership and bold ideas, creating a sense of inertia that is difficult to overcome.

A crisis of optimism

Perhaps the most concerning insight came from Cameron Burke, who shared his growing sense of pessimism. “I haven’t felt BC this lethargic and pessimistic for 20 years,” he noted. “It seems like most conversations I have these days will at some point get into why it’s so hard to grow a business in BC, and why it’s so expensive to live here.” Despite ongoing innovation, the high cost of living and difficulties in scaling businesses in Vancouver appear to be dampening the entrepreneurial spirit.

Abhay Gupta offered a similar assessment, framing it as a “vicious circle.” He observed that many entrepreneurs in Vancouver are starting companies as a last resort after failing to secure high-paying jobs, rather than out of a burning desire to innovate. “In Vancouver, people open startups since they weren’t able to find a well-paying job. Giving up a $300K job in the Bay Area means you would try to ship a product faster and/or raise funding sooner.”

Real estate and broader economics

Several commenters pointed to broader economic conditions that are unique to BC. Pieter Dorsman acknowledged that Vancouver’s startup ecosystem has grown “spectacularly” over the past 25 years but now faces macroeconomic challenges, including “too much debt in the system, a slow housing market, and the cost of living in BC.”

Real estate, a dominant force in BC’s economy, continues to siphon attention and investment away from the tech sector. Richard Waugh went further, outlining some of the structural issues hindering Vancouver's growth. “Real estate—and the massive underground economy it enables—continues to overshadow the entrepreneurial landscape,” he said, adding that Vancouver’s economy is also burdened by money laundering and illicit drug trafficking. While these issues may seem tangential, he believes they reflect broader challenges that skew BC’s priorities away from fostering a vibrant startup ecosystem.

Moving forward as collaborators and leaders

Despite these challenges, most people I know believe Vancouver’s startup ecosystem still has massive potential. The foundation is there: a wealth of talent, pre-seed and seed-stage funds, active angel networks – including eFund, Angel Forum, Women's Equity Lab, Cindicates, WUTIF Capital, VANTEC, and Startup TNT – and a growing entrepreneurial infrastructure. As Dorsman noted, “We are going through a slower period, but the infrastructure for growth is there. Let’s get to work and collaborate.”