More than 500 U.S.-based tech firms with Canadian founders or entrepreneurs – who were educated in Canada but later left for the U.S. – have together raised about US$414 billion, according to data compiled by Waterloo, Ont.-based tech investor Jesse Rodgers (photo at right).

Fifty-six of the U.S. companies are worth more than $1 billion, said Rodgers, who founded and runs pre-seed venture fund Barn Ventures.

Most of the companies are in San Francisco. Almost three-quarters are in California. Half of them were started in the last two years.

“Together they make up a meaningful share of the last decade’s most valuable American technology companies – staffed, in part, by people Canada educated,” Rodgers wrote in a Barn Ventures blog. “This is talent we trained and then never activated.”

“The line runs straight out of our lecture halls – world-class ability we built, then failed to raise to its potential, so it went where it was embraced,” he said.

Rodgers compiled the data from the Dominion List, a database of U.S.-based companies with founders who were born or educated in Canada.

“This should be a five alarm fire for policymakers in Canada,” said Lucy Hargreaves, co-founder of the business advocacy group Build Canada.

The University of Waterloo alone produced 216 of the founders across 180 U.S. companies. The University of Toronto produced 118 founders across 107 companies.

McGill University, the University of British Columbia, Queen’s University and Western University produced, respectively, 67, 48, 40 and 19 founders across a total of 151 companies. “We pay for the schools. We train the founders. Then they leave and build somewhere else. The money and the jobs go with them. That’s a massive problem,” Hargreaves said in a LinkedIn post.

Rodgers wrote that Canada hands these builders to non-profits: incubators, accelerators, grants, “built to help, never to own.”

“The Americans do similar support, but they treat it as investment, not charity,” he said.

“That difference compounds. It funds a sophisticated system that targets Canadian and American builders as early as high school, and they place Canadians into it deliberately, because the returns are there.”

Over the last five to 10 years, U.S. investors have built a program for every stage of a technical person’s path – and crucially, each one is engineered to remove a specific reason someone might have stayed put, Rodgers said.

U.S. programs include Contrary, which funds students in Canada – providing a small early cheque as a relationship tool, on the cap table before any domestic fund shows up. Emergent Ventures grants do the same with no relocation required.

“The crown jewels of the AI era carry Canadian-trained founders,” Rodgers said.

OpenAI, Anthropic, and xAI – the three leading frontier labs, north of $300 billion in combined funding – “all appear on this list through founders and early scientists trained in Canada, the lineage that traces back to Geoffrey Hinton’s lab at Toronto,” he said.

“Add Uber and Databricks and you have a sense of the altitude. These are American companies. The talent inside them is, substantially, ours.”

Among the most prominent Canadian entrepreneurs to decamp to the U.S. are OpenAI co-founder Ilya Sutskever, who attended University of Toronto, and Uber founder Garrett Camp, who grew up in Calgary. Others include SpaceX’s Elon Musk, who still retains Canadian citizenship, Anthropic’s Chris Olah and eBay’s Jeff Skoll.

Exodus of Canadian-educated founders has increased in the past three years

From 2016 to 2022, the Dominion List added 20 to 30 Canadian-founded U.S. companies a year, Rodgers said.

Then it inflected: 60 in 2023, 93 in 2024, 87 in 2025 – the annual rate roughly tripled, and half of all 517 companies were founded in 2023 or later.

The share landing in San Francisco climbed right along with it (about two-thirds of the 2025 cohort). Some of that steepness is a curated list catching recent names more easily than old ones – “but a threefold jump that lines up exactly with the AI boom and the explosion of student-stage programs is not an artifact,” Rodgers noted.

“None of this is history you can shrug off – the conveyor is pulling more Canadians than ever, and the people it’s processing now were in a Canadian classroom eighteen months ago.”

In late January 2026, San Francisco-based Y Combinator (YC) quietly removed Canada from its approved incorporation jurisdictions, which would have forced Canadian teams to flip to Delaware to take the $500,000. After a week of backlash, Garry Tan, president and CEO of YC, reversed it and reassured everyone that YC funds dozens of Canadian startups a year.

“But read why he said they pulled it: YC’s top-performing Canadian companies all reincorporate in the U.S. anyway – and over YC’s twenty-year history, the ones that flipped reached roughly twice the average valuation of those that stayed incorporated in Canada,” Rodgers said.

“The policy got reversed; the belief behind it is just true.” YC briefly made the structural reality explicit, the community made them take it back, and the reality kept operating underneath – because it’s the same reality this dataset describes, he said.

“The drain [of Canadian founders] doesn’t need a policy. It’s already built into where the capital, the density and the upside live.”

“Strip the branding off every rung of the conveyor,” Rodgers said, and the U.S. offer the same three things, and it’s exactly the package Canada underdelivers:

1. Capital at the idea stage – or before there’s an idea at all. Canadian institutions, by founders’ own accounts, won’t move until success is already obvious. By then the founder is gone.
2. Density – a room of people going all-in, which matters more than any curriculum. Co-living, campuses, retreats: peer pressure as a service.
3. Access – mentors, a Demo Day with a thousand chequebooks, a recruiter who staffs your team, a Q&A with the CEO of OpenAI.

“Each one quietly absorbs a reason a Canadian might have stayed,” Rodgers said.

The salary gap – U.S. tech pay runs about 46 percent higher adjusted, roughly US$122,600 versus Cdn$83,700 – “is just the backdrop,” he added.
“They aren’t winning on salary. They’re winning on speed, belonging and the removal of every excuse. And they now start the pitch while the target is in second year of undergrad. Or earlier.”

So the answer for Canada was never “build our own YC,” Rodgers said. “A Canadian YC-clone arrives a year late to a strategy that’s already commoditizing.”

Canada has the builders but lacks the infrastructure to recognize and reward them

The thing Canada has is the one input none of these programs can manufacture: the builders. The Dominion data proves it – 88 percent of those founders are our graduates, he noted.

The University of Waterloo region produces them on a schedule, he said. “The missing piece isn’t talent, or even capital – it’s the infrastructure to recognize and back people before someone in San Francisco does, and now ‘before’ means before they’ve finished a degree.”

“We trained the talent and handed it off at the exact moment it became investable, because our half of the system runs on charity and theirs runs on capital,” Rodgers said. “That gap – charity here, investment there – is a massive, ongoing transfer. We pay; they earn.”

There’s no single solution to a gap this wide, he said. “No one accelerator, no one fund, no one policy closes it; this was never a problem you solve once.”

“We keep missing the opportunity because we keep filing it under charity: incubators, grants, help, built to assist and never to own. But it was always an investment, and the Americans have been collecting the returns for a decade.”

However, Rodgers said the Builders Club in Waterloo is creating the density – a community of builders going all-in around each other.

Barn Ventures is providing the capital that shows up before it makes sense: first cheque, pre-incorporation, equity early, “while the founder is still in the room and not yet on a flight to San Francisco.”

“We’re not trying to replace the conveyor – you can’t out-San-Francisco San Francisco, and some of the best will still go,” he said.

But the Builders Club and Barn Ventures are designed to get in at the earliest stage: the same three things San Franscisco sells – capital, density, access – “offered first, at home, as investment. A stake in the talent we already produce, instead of a free handoff.”

“Waterloo produces the talent on a schedule. The opening is to back it here, as if it were worth owning – because it is,” Rodgers said.

“Right now we’re running someone else’s playbook a decade behind. The way out was never to run it better. It was to run a different one – on the one input no program can manufacture: the builders, and the place that keeps making them.”

Arlene Dickinson (photo at right), managing general partner at District Ventures Capital, pointed out founders coming from other countries to build U.S. companies “isn’t just a Canada thing.”

A 2026 National Foundation for American Policy study shows U.S. unicorn founders come from many countries, she noted in a LinkedIn post responding to Rodgers’s blog. India produced 96 U.S. unicorn founders Israel produced 60. The U.K. produced 47. China produced 41. Canada produced 30.

“So, more than half of all U.S. billion-dollar startups have at least one immigrant founder,” Dickinson said. “It’s not a Canada exodus as framed. I'd say it's what happens to every country that produces strong talent next to the world's largest capital market.”
Some of this is fixable with more growth capital here and better tax policies for founders, she said.

“But we know even that's not the main reason companies leave,” Dickinson said. “If you take the U.S. money then relocating HQ south usually comes baked into the term sheet. It's not simply a choice founders are making because the grass is greener. There needs to be a will to build here.”

Canada has built a system that actively discourages business formation

Economic and policy professional Charles Lammam (photo at right), wrote in an article in The Hub that Canadian entrepreneurship is declining across nearly every measure.

According to the latest Statistics Canada data, the number of active businesses across the country (now approximately 935,000) fell by 4,400 between March 2024 and March 2026. “Too few new businesses are opening to replace the ones that close,” he said.

This matters because new businesses create jobs, introduce innovations, and push incumbents to improve, Lammam said. “When business formation stalls, the whole economy feels it, with slower productivity growth and less opportunity.”

For many years, Canada has built a system that actively discourages business formation through regulatory complexity, reduced competition, and uncompetitive taxation, he noted.

“The challenge isn’t choosing between formation and scaling but excelling at both. Canada, however, falls short on both dimensions,” he said.

Business formation in Canada lags Estonia and Singapore, while scaling infrastructure lags the U.S. In fact, Canadian companies and entrepreneurs increasingly relocate down south for growth capital and opportunities.

Lammam said the countries that excel at business formation share three broad framework conditions: competitive taxation, less restrictive regulation, and more competition in product markets.

“They largely get the framework right first, then use targeted programs to close specific gaps. Framework conditions affect every business, while support programs only help the ones that qualify,” he said.

Leading countries keep the headline statutory corporate tax rate low, Lammam said. Ireland sits at 12.5 percent, Singapore at 17 percent, and Estonia’s 22 percent applies only to distributed profits – effectively zero for companies that reinvest their earnings. Israel is at 23 percent. Canada’s combined federal-provincial rate averages 26 percent (higher in some provinces).

Personal income tax follows the same script. Top marginal rates among the leaders cluster between 22 percent (Estonia’s flat rate) and 24 percent (Singapore), and even the higher rates in Ireland (40 percent) and Israel (50 percent) fall well below Canada’s combined federal-provincial ceiling of nearly 54 percent.

Rates aren’t the whole story; the structure of the tax system matters too, Lammam noted.

Estonia taxes only distributed corporate profits, rewarding reinvestment. Singapore exempts capital gains entirely. Ireland offers a 10-percent rate on qualifying entrepreneurial exits up to €1.5 million.

“Each of these rewards building a company over extracting income from one. Canada’s tax system does the opposite,” he said.

Ottawa taxes capital gains outright, and in 2024 it proposed raising the inclusion rate further, a move entrepreneurs saw as penalizing risk-taking before the government shelved it in 2025. Rollover provisions that exempt reinvested earnings remain narrow, and while the Lifetime Capital Gains Exemption offers relief on small business shares (totalling Cdn$1.275 million), it’s a one-time allowance worth a fraction of the exemption American entrepreneurs can claim under the U.S. Qualified Small Business Stock rules (US$15 million), and unlike the U.S. version, it can’t be claimed anew on each successive venture, Lammam said.

On consumption taxes, the leading countries fund more of government through this broad-based, efficient source. Estonia derives 39.5 percent of tax revenue this way, Israel 34 percent, Singapore 26.7 percent, and Ireland 25.8 percent. Canada, at 21.6 percent, relies on them least of all.

Canada imposes heavier regulatory burden than leading countries

Canada is also at the bottom of the pack on regulatory burden, Lammam said. According to the World Bank’s regulatory framework ranking, where a higher score is better, Singapore (77.6), Ireland (77.1), Estonia (75.6), and Israel (73.0) rank among the top 30 globally. Canada trails every leader, scoring 71.8 – 33^rd out of 101 nations.

“Canada has allowed the burden of regulation to grow significantly, along with compliance costs, hitting small businesses hardest,” he said.

Canada has no shortage of government support programs for new businesses, Lammam said. By one count, the federal government alone runs 134 programs with innovation or business support mandates, spending billions annually through direct subsidies and tax credits.

The country maintains the Business Development Bank of Canada, Export Development Canada, Farm Credit Canada, the National Research Council-Industrial Research Assistance Program, and dozens of sector-specific funds. The Scientific Research and Experimental Development tax credit provides among the most generous R&D support globally.

Provincial governments add their own layers of grants, loans and tax credits. Entrepreneurs must navigate overlapping programs across multiple jurisdictions, each with distinct application processes and eligibility criteria.

“Programs can help individual companies access capital or subsidize specific activities, but framework conditions determine whether would-be entrepreneurs bother starting in the first place,” Lammam noted.

A well-designed grant program supports some companies; competitive tax rates and light regulation help every business in the economy, without a government program deciding case by case who deserves it, he said.

“Streamlining the current patchwork of programs would help, but no amount of tinkering substitutes for fundamental reform of tax rates, regulatory burden, and competitive intensity,” he added.

Canada faces a structural challenge absent from the countries examined, Lammam said. Neither Estonia, Singapore, Ireland, Israel, nor France operates under a federal system. As unitary states, they implement tax reforms, regulatory changes and competitive policies nationwide simultaneously.

Canada’s provincial jurisdiction over taxation, business regulation, securities markets and interprovincial trade creates fragmentation and coordination challenges that can delay and dilute reform, Lammam said. “Effective reform in Canada requires federal-provincial coordination to have the greatest national impact.”

“Canada’s poor ranking on business entries reflects policy decisions that work against entrepreneurship. Other countries show that deliberate policy choices can create the conditions for entrepreneurship to flourish.” Barn Ventures, The Hub

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See also: "10 months in America taught me why Canada is falling behind," by Jeeman Khan (Part 1 in the July 1, 2026 Short Report and Part 2 in the July 8, 2026 Short Report).