Not every win needs a term sheet

The Canadian Venture Capital and Private Equity Association (CVCA) recently released its annual report–and it's time to ask ourselves: Are we measuring what truly matters in our tech ecosystem?

The ritual of tracking venture capital flows has become our industry's equivalent of quarterly earnings reports. While these numbers provide valuable market insights, they risk reinforcing a problematic narrative: that venture funding is the primary milestone of entrepreneurial success. This mindset not only misleads aspiring founders but potentially undermines Canada's technological sovereignty at a critical time.

A self-fulfilling prophecy of VC metrics

When we constantly spotlight VC funding rounds, we create a self-fulfilling prophecy. Young entrepreneurs begin to view raising capital as their primary objective rather than building sustainable businesses. This "showman entrepreneurship" – where founders feel pressured to display success to achieve success – has become particularly problematic in our current economic climate.

What if, instead of celebrating funding rounds, we tracked and publicized the success stories of bootstrapped startups? What if our industry publications highlighted companies that achieved profitability through customer revenue? This would send a powerful message to the next generation of founders: that building a business on customer relationships, not investor relationships, is a viable and often preferable path. I wish I knew this back when I was a new founder.

Believing in our founders

The truth is, we need to fundamentally shift how we support Canadian entrepreneurs. This starts with belief – in our founders, in their visions, and in their ability to build world-class companies without necessarily following the Silicon Valley playbook. If we don't believe in them, who will?

Recent trade tensions with the United States have highlighted the importance of building strong, independent Canadian tech companies. Yet paradoxically, this realization comes at a time when we're still pushing many founders toward a funding model that often leads to foreign ownership and control.

An overlooked opportunity: Government as first customer

While we fixate on private capital, we often overlook the significant potential of non-dilutive government funding and, more importantly, government procurement. Canada has robust programs to support innovative businesses, but our procurement systems often create unnecessary barriers for startups. Often, startups don’t know how to navigate the often concealed procurement requirements. Imagine if the procurement process had supporting mechanisms for startups, allowing government agencies to access new local talent.

The impact would be transformative. Instead of founders spending months pitching VCs, they could focus on serving real customers and solving real problems. This isn't just about government support – it's about creating a culture where Canadian organizations, both public and private, don't shy away from being early customers for innovative local solutions.

Redefining success

We need to challenge the notion that operational scale equals success. A ten-person company generating steady profits and creating meaningful value for its customers isn't less successful than a hundred-person venture-backed startup burning through its Series B funding.

The mindset of “hiring means growth” also fuels the main frustration of the jobseekers: ghost job postings. People who are dealing with the challenge of securing employment, find themselves having wasted time applying to startups who have no intention of hiring, despite their job postings.

Some of Canada's most resilient tech companies have grown through customer revenue, maintaining control of their destiny while building sustainable businesses. These companies might not make headlines for massive funding rounds, but they create stable jobs, contribute to our economy, and often solve critical problems for their customers.

The path forward

As we reflect on the latest VC numbers, let's remember they tell only part of the story. While venture capital remains valuable for certain business models – particularly capital-intensive technologies – it's not the only path to success.

What if we created a parallel tracking system for bootstrapped companies? What if we celebrated customer acquisition milestones as enthusiastically as we celebrate funding rounds? What if we highlighted profitable ten-person companies alongside our unicorns?

The time has come to broaden our definition of success in the Canadian tech ecosystem. This means supporting founders who choose to grow through revenue rather than funding rounds. It means improving government procurement processes to better support local innovation, and celebrating sustainable growth alongside rapid scaling. It also means creating metrics and recognition systems for bootstrapped success stories, and encouraging Canadian organizations to become early adopters of local technology.

The next wave of Canadian tech success stories might not look explosive like Shopify or Lightspeed. They might be more paced, more focused, and more sustainable. And that's not just okay – it might be exactly what our ecosystem needs.

Let’s follow the metrics that we truly care about, and not the ones that we are told we should.

Arman Mottaghi is founder and CEO of Properate.