This is exactly what I’ve seen.
Canadian founders who are pitching to local investors are getting the signal that true venture pitches aren’t realistic.
So they are adjusting their “product” – their current investment round + pitch – to the “market” of Canadian investors. But that product is completely not a fit (as you’ve described) for the market of US investors.
On the other hand, Waterloo based companies have a direct pipeline into YCombinator and US investors.
So because Canadian investors at the earliest stages aren’t investing true venture capital, we are losing the biggest thinking deals to the US.
And Canadian entrepreneurs – who get told they need to aim bigger – in reality are not getting funded locally when they do think big.
The outcome is that the best “think big” founders are increasingly skipping the local market.