Being a founder means having both ambition and responsibility: the ambition to grow your business and the responsibility to attract capital in a manner that would help it to remain sustainable over time. As it continues to transform, the start-up funding environment in Canada is changing rapidly in 2025. Investment in venture capital dropped by 26 per cent during the first half of the year relative to 2024, compelling founders to consider more than just a VC round and be more strategic, more diversified.
Fundraising in the contemporary world is no longer a simple matter of raising money. It entails a planned combination of capital strategy, compliance and clarity. Understanding the evolving funding landscape, particularly the balance between dilutive (equity-based) and non-dilutive (grants, credits, and incentives) sources, has never been more important.
Below, we outline the key dos and don’ts of fundraising for Canadian startups in 2025.
Canada remains one of the most supportive jurisdictions for R&D-driven startups. Programs that preserve equity should be a first stop:
Raising capital in 2025 takes longer. Investors are more cautious, performing deeper due diligence. Founders must:
A compelling pitch deck alone is insufficient. Investors expect a clean financial backbone:
Failing to distinguish between the two risks, reputational and legal consequences.
With VC funding down significantly, dependence on equity rounds alone can weaken both valuation and ownership retention. Instead, diversify with:
The federal government has indicated that it may increase the flow through share schemes, which were the preserve of mining companies, to technology and clean-tech. This would allow one to invest in it more efficiently as an early investor. Those founders who are ahead of these policy changes will have a competitive advantage.
There is a growing movement to strengthen the Canadian startup ecosystem without over-reliance on U.S. capital. Provincial funds are reinforcing this:
Positioning your startup as “built in Canada, for Canada (and beyond)” resonates strongly with both investors and policymakers in 2025.
In 2025, fundraising in Canada is more compliance-driven than in the past years because it is leaner and slower. The most successful founders will be ambitious and precise, combine conventional equity with non-dilutive sources, use tax benefits, and match their stories to the changing innovation priorities in Canada. We provide accounting, tax planning, and advisory services to startups so that they can capitalize their funding source with accounting, tax planning, and advisory services at Online-Accountant.ca.
