Fifty-six per cent of Canadian startup leaders expect business conditions to improve in 2019. But they note challenges in raising capital and hiring talent with the skills needed to grow their businesses, says a report released on Wednesday by Silicon Valley Bank .
The inaugural Canada Startup Outlook reports that 31 per cent of respondents to a survey said they expect business conditions to stay the same.
“The Canadian startup ecosystem is vibrant and growing throughout the country,” said Barbara Dirks, head of Canada for Silicon Valley Bank. in a statement.
“We’re thrilled to release SVB’s inaugural Canada Outlook, and share what’s on the minds of Canadian entrepreneurs. Even amid global and economic volatility, Canadian founders tell us that they are optimistic about the year ahead. They are in growth mode – 84 per cent plan to hire in 2019 – but they are very aware of the challenges in finding enough skilled talent and raising capital.”
Here are some of the key highlights from the report:
- 13 per cent of respondents expect business conditions to be worse in 2019;
- 24 per cent of startups say the fundraising environment is extremely challenging;
- 48 per cent say they expect to raise their next source of funding from venture capitalists, while 28 per cent expect angels, micro venture capitalists or individual investors will supply their next round of funds;
- despite the attention paid toward initial public offerings, most Canadian startups (56 per cent) expect to be acquired;
- 46 per cent expect mergers and acquisitions activity to increase in 2019 and 40 per cent expect activity to maintain 2018 levels;
- 80 per cent say they plan to increase their workforce in 2019;
- 89 per cent say that finding workers with the skills necessary to grow their business is somewhat or extremely challenging;
- 40 per cent have at least one woman on the board of directors and 60 per cent have at least one woman in an executive position;
- 60 per cent say government benefits have a positive impact on the innovation economy;
- the three most important public policy issues affecting Canadian startups are access to talent, consumer privacy and cybersecurity;
- the most common government-sponsored programs startups have benefited from are the Scientific Research and Experimental Development tax incentive, Global Skills Strategy/Global Talent Stream and the Start-up Visa Program.
– Mario Toneguzzi