Senate inquiry into business scaling challenges
A Senate committee is looking into methods to help small and medium-sized businesses in Canada survive long enough to scale.
The "Valley of Death" funding gap
Jameson Berkow, a capital markets reporter for The Globe and Mail, described the funding gap facing fast-growing companies in Canada as a "valley of death." According to Berkow, this issue has held back Canadian businesses for decades.
Berkow noted that while options exist for smaller financings or investments up to a few million dollars, there are also many more choices available in the tens of millions of dollars. However, he reported a desolate space exists between roughly $5-million and $25-million where startups struggle to secure money needed to scale.
Consequences of failing to cross the gap
The article states that it is at this point where many companies do not survive the scaling period. Those that successfully cross the funding gap are often left permanently disadvantaged with scant resources relative to their international peers, according to Berkow.
This resource disadvantage is reported to drag down economic growth and exacerbate Canada's productivity crisis.