Canada Puts $75 Million Into Pre-Seed Venture Capital for the First Time

Canada will direct $75 million to pre-seed and seed investment in domestic startups, marking the first time the country's venture capital strategy reaches the earliest stage of company formation. Industry Minister Mélanie Joly announced the move on Oct. 22, 2026, under Canada's Early and Growth Stage Investment Strategy.

The National Angel Capital Organization (NACO), which pushed for the change, said the money will strengthen the pipeline of Canadian startups progressing to Series A and beyond. NACO CEO Claudio Rojas framed the problem in blunt terms.

"For the first time, Canada's venture capital strategy starts at pre-seed. For too long, our startups have rolled out of the country like acorns and grown into massive oaks elsewhere. When their first investors are Canadian, companies can more readily take root here," Rojas said. "This is how we will build more homegrown global champions."

Why the first cheque matters

The numbers behind the policy shift are stark. In 2015, seven in ten Canadian-founded startups that raised US$1 million or more were still based in Canada, according to Leaders Fund. By 2024, that share had fallen to one in three. NACO argues access to risk capital is among the most powerful factors in whether a company stays in Canada, and that the first cheque often decides where a founder builds the future.

The government made the announcement at Waabi, a Toronto company building artificial intelligence for self-driving trucks. NACO used the venue to make a broader point: large cities don't hold a monopoly on great founders.

The group's showcase example is St. John's, Newfoundland. Local angel investors there backed Verafin, a fraud detection and anti-money laundering software developer that grew into a US$2.75 billion company. "St. John's shows what happens when local angels write the first cheque. Verafin grew from an acorn into an oak, and its acorns have taken root across the city," Rojas said.

A new generation of angels in the city is now backing companies including CoLab, which makes engineering design review software, and Spellbook, which builds AI tools for lawyers. "That is the cycle of growth this strategy can start in every region," Rojas said.

How NACO built the case

The announcement caps a two-year lobbying effort with a paper trail:

• Summer 2025: NACO's pre-budget submission recommended an early-stage matching funds program for pre-seed and seed.
• Fall 2025: NACO's Unified Capital Strategy report called for innovation policy covering the full capital continuum, starting at the first cheque.
• March 2026: NACO and Startup Genome published Canada's Funding Gaps, documenting the gap at the earliest stages; NACO's Seeding Growth white paper, built on consultation with more than 250 ecosystem leaders, set out how the early-stage envelope could be designed.
• NACO's Budget 2026 submission renewed the recommendations.

NACO expects the $75 million to follow the trajectory of earlier federal programs. Ottawa's venture capital support began with the Venture Capital Action Plan in 2013 and expanded through successive programs; Rojas says he anticipates the same path here.

What happens next?

NACO will convene angel networks and early-stage investment organizations from across the country in the coming weeks to shape how the strategy works. "Our members specialize in backing founders at pre-seed and seed. Their expertise will help this capital reach Canada's moonshot companies at the speed required to win the global competition for high-growth companies," Rojas said.

NACO itself represents more than 4,000 angel investors and more than 100 angel networks and early-stage investment organizations. Since 2010, its members have invested over $1.92 billion in more than 3,000 Canadian companies. If the pre-seed stream works as intended, the $75 million is the start of a journey rather than the destination — the first federal bet that keeping founders Canadian starts with who writes cheque number one.