Gerard Metrailler

𝐁𝐢𝐠𝐠𝐞𝐫 𝐢𝐬𝐧’𝐭 𝐚𝐥𝐰𝐚𝐲𝐬 𝐛𝐞𝐭𝐭𝐞𝐫: the strategic levers that allow Canadian VCs to generate top-tier returns without relying on billion-dollar outcomes 👇 In my last post, I highlighted that while U.S. venture exits are larger across every decile, Canadian fund-level returns can still match them when strategy and discipline are applied. Today, I’m sharing the numbers that illustrate exactly how. Introducing - 𝐓𝐡𝐞 𝐕𝐞𝐧𝐭𝐮𝐫𝐞 𝐑𝐞𝐭𝐮𝐫𝐧𝐬 𝐌𝐚𝐭𝐫𝐢𝐱 - a framework that illustrates how fund size, entry ownership, dilution, and exit value collectively interact to drive TVPI. The model applies actual Canadian exit values (25th, 50th, 75th, and 90th percentiles from 2010 – 2025) across a range of fund sizes ($25M – $100M), entry ownership levels (2.5% – 12.5%), and dilution rates (15% – 60%). Each cell shows the TVPI a single investment could generate under those conditions. 𝐓𝐡𝐞𝐬𝐞 𝐚𝐫𝐞 𝐭𝐡𝐞 𝐤𝐞𝐲 𝐢𝐧𝐬𝐢𝐠𝐡𝐭𝐬 𝐭𝐡𝐚𝐭 𝐫𝐞𝐚𝐥𝐥𝐲 𝐦𝐚𝐭𝐭𝐞𝐫 💡 1️⃣ "𝐘𝐨𝐮𝐫 𝐟𝐮𝐧𝐝 𝐬𝐢𝐳𝐞 𝐢𝐬 𝐲𝐨𝐮𝐫 𝐬𝐭𝐫𝐚𝐭𝐞𝐠𝐲." Holding exit value, dilution, and entry ownership constant, TVPIs under a $25M fund are 100% higher than a $50M fund and 300% higher than a $100M fund. Across scenarios returning ≥1.0x, $25M funds have 10, $50M funds 1, and $100M funds none - showing exactly why smaller funds can more easily generate multiples of committed capital. 2️⃣ 𝐇𝐢𝐠𝐡 𝐫𝐞𝐭𝐮𝐫𝐧𝐬, 𝐡𝐢𝐠𝐡 𝐯𝐚𝐫𝐢𝐚𝐛𝐢𝐥𝐢𝐭𝐲. The highest TVPIs are seen in $25M funds, but they also exhibit the widest range of outcomes. For example, under 15% dilution, TVPI spreads are 2.31x for $25M, 1.14x for $50M, and 0.58x for $100M funds - underscoring that while "small funds can outperform", manager selection remains at the forefront. 3️⃣ 𝐂𝐚𝐩𝐢𝐭𝐚𝐥 𝐞𝐟𝐟𝐢𝐜𝐢𝐞𝐧𝐜𝐲 𝐦𝐚𝐭𝐭𝐞𝐫𝐬. Holding all else constant, TVPIs with 15% dilution are 113% higher than with 60% dilution. This underscores the importance of using reserves to back a fund’s winners - top-end exits with lower dilution are key to making venture math work. 4️⃣ 𝐄𝐧𝐭𝐫𝐲 𝐨𝐰𝐧𝐞𝐫𝐬𝐡𝐢𝐩 𝐢𝐬 𝐞𝐯𝐞𝐫𝐲𝐭𝐡𝐢𝐧𝐠. In diversified portfolios, spreading capital too thin and taking low entry ownership can put a fund on the back foot from the start, limiting its ability to generate fund-level returns - even on outlier exits. Securing high entry ownership relative to fund size positions the fund to outperform when things go well, and excel when they go exceptionally well. The conclusion is clear: 𝐬𝐭𝐫𝐚𝐭𝐞𝐠𝐲 - 𝐧𝐨𝐭 𝐡𝐞𝐚𝐝𝐥𝐢𝐧𝐞𝐬 - 𝐝𝐫𝐢𝐯𝐞𝐬 𝐯𝐞𝐧𝐭𝐮𝐫𝐞 𝐫𝐞𝐭𝐮𝐫𝐧𝐬. The Venture Returns Matrix is a reminder that Canadian VC success isn’t about chasing the next multi-billion dollar exit. It’s about 𝐟𝐮𝐧𝐝 𝐦𝐚𝐭𝐡: right-sized funds, well-structured investments, and disciplined ownership. Get those right, and there is no reason why Canadian venture can't generate top-tier returns on par with the best funds globally. Signals in the Noise 🤓

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Three founders. A basement in Toronto. Five years later → a $200M growth equity deal. Loopio’s journey is a masterclass in how traction—not hype—attracts capital: Lesson #1: Solve painful workflows, not trendy ideas Zak Hemraj didn’t chase AI or crypto. He built Loopio to fix one hated process: responding to RFPs. Real pain → real adoption. Lesson #2: Build first. Fundraise when it compounds. No VC decks in year one. Just product, customer calls, and iteration. By the time OpenView invested, traction was undeniable. Lesson #3: Win a niche before chasing the TAM. They didn’t try to be “Salesforce for everything.” They went deep on RFP automation. That clarity → dominance in one vertical → $200M from Warburg Pincus. The takeaway for founders? You don’t raise to survive. You raise to scale what’s already working. That’s the bridge Loopio built—between traction and capital. And it’s the same bridge every disciplined founder needs. Because investors don’t fund ambition. They fund signals. Which SaaS startup today reminds you of Loopio’s trajectory? #B2BSaaS #FounderJourney #StartupCaseStudy #Loopio #GoToMarket #BootstrappedToFunded #CanadianStartups #GrowthEquity #VCFunding

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Canada just dropped $25M into a single gap in the venture pipeline. CIBC and Women in VC announced a $25M fund targeting female-led SaaS companies. The data is simple: → Women-led startups get <3% of global VC funding → Yet they consistently show higher capital efficiency and stronger early retention → And still, they receive less than 3% of global venture funding → Most never raise again because they weren’t funded properly to begin with This fund is one of the first signals that Canada’s capital markets are starting to price talent with discipline. Because this isn’t about “supporting women.” It’s about investing in founders who are already outperforming, even when under-resourced. The bigger signal? → Founder profile ≠ founder potential → Capital is starting to chase performance, not pitch polish → SaaS isn’t just a sector - it’s systems. And women are building better ones. I’ve seen it first-hand: when capital sharpens, better companies emerge and cleaner GTM systems get built. Some of the best I’ve seen are led by founders the market still underestimates. It shows the ecosystem is stronger when capital chases performance over pattern. #femtech #womeninvc #womenintech #saas #femtech #womeninvc #womenintech #saas

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Canada can’t keep funding everyone and expect to build global winners. Harley Finkelstein (Shopify's President) just dropped a bunch of SR&ED reforms: ✅ Pre-approvals ✅ Cut out middlemen ✅ Reward companies that keep IP in Canada ✅ Expand support to commercialization All great ideas. Here’s the problem: Canada wants to fund everyone. But in tech, outcomes follow a power law. Most companies will fail. A few will drive all the value. SR&ED helps any company that qualifies. Doesn’t matter if you’re the next Shopify or a zombie org running on government dollars. Yes, we increased funding. $4B in tax credits is no joke. But if we want to build real winners, tax credits aren’t enough. We need a second playbook for companies at the tipping point. Series A and B teams ready to scale. Ready to win global markets. That means: ✅ Strategic co-investment alongside private capital ✅ Government and pseudo-government procurement contracts going to startups (not just grants) ✅ Direct incentives to hire, sell, and export allocated to scale-stage companies ✅ Fast lanes for regulatory and pilot approvals SR&ED fixes are great. But if we want to build the next generation of category leaders, we have to do more than simplify paperwork. We have to pick winners and bet bigger. Another 100 seed-stage startups won’t change the economy. Five more Shopifys would.

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REGULATION BOTTLENECKS ARE KILLING CANADA'S INNOVATION We talk endlessly about funding, talent, and R&D, but the real choke point isn’t capital. IT'S REGULATION! It’s the silent tax on ambition. The slow bleed of opportunity. Every week of delay costs us innovation, exports, and credibility. We’ve built a system that moves slower than the science it governs. - PMRA reviews can take years. - Novel food approvals drag on. - Interprovincial trade barriers make it easier to sell abroad than at home. We are funding companies to wait out the regulatory clock. An incredible waste of assets that could be going into new ideas and new innovations We are losing ground, not because we lack ideas, but because our systems can’t keep up. Here’s the opportunity: Canada can lead the world in agile, trusted, evidence-based regulation, the kind that protects people and accelerates innovation in agriculture, biotech, and climate tech. We don’t need less regulation. We need regulation that leads, continuously learns and takes on weighted risk alongside our innovators. I’m calling on entrepreneurs, policymakers, investors, and innovators. I’m compiling a national record of what’s working - and particularly what isn’t. If you’ve experienced: - Delays or duplications in PMRA, CFIA, or environmental approvals - Interprovincial trade barriers or inspection bottlenecks - Lost deals or stalled projects because of regulatory uncertainty ** Share your story** Comment, DM, or tag colleagues and organizations who have lived this reality. This is not another report, this is a call to action and I will be asking my friends and colleagues to amplify This continues the work I began with Canada’s Economic Strategy Tables more than 8 years ago promising agile regulatory environment. We built the case for growth in our Agrifood system. Now we need the courage for reform. Let’s align those ready to lead change, including: Council of Canadian Innovators | Conseil canadien des innovateurs (CCI) Business Council of Alberta Canadian Chamber of Commerce Creative Destruction Lab Canadian Agri-Food Policy Institute (CAPI) Agriculture and Agri-Food Canada/ Agriculture et Agroalimentaire Canada Help map Canada’s real regulatory roadblocks. I’m collecting: - Case studies and examples of approval delays - Stories of lost deals or stalled projects - Practical ideas for reform ➡️ Comment or DM me your experience. ➡️ Tag colleagues and orgs who’ve lived this.

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🚨 NEW POD ALERT 🚨 On the latest episode of the #humanunicornpod, I sit down with Amar Varma — co-founder of Mantle ($10m raised), Autonomic (acquired by Ford for <$400m), Xtreme Labs (acquired by Pivotal), longtime builder of Toronto’s tech ecosystem-- and maybe most importantly, amazing father of 4. From pioneering mobile app development before the iPhone App Store existed, to scaling two of Canada’s most successful exits, Amar shares what it really takes to build durable companies outside Silicon Valley. We dive into his founder journey, lessons learned from working with global tech giants, and his vision for the next wave of Canadian unicorns including the one he's building now- Mantle. 🇨🇦🦄

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