By Hari Acharya, PomeGran, Toronto, Canada

We have all been there – we are introduced to an early stage company that has an amazing technological innovation; they have put a core team together, raised some seed financing and are now ready to take on the world!

I keep asking myself: How can we create an ecosystem that nurtures entrepreneurship, brings capital providers to the table, and allows great technologies to have a fighting chance to become great companies?

The access to smart capital – by which I mean money that comes with those who have built products and companies, and successfully scaled and/or exited those ventures – is very rare in Canada.  The risk-taking psychology, so necessary for companies to prosper, is in short supply. No doubt, we are able to fund and create path breaking applications in the telecom, AI and medical device sectors, to name a few. But, fewer than 10% of those breakthroughs will survive more than two years, and fewer than 30% of those companies will actually see customers buy their products.

I believe there are several strategies that can be employed to try to increase the probability of success:

1. Successful entrepreneurs need to spend more time mentoring:Richard Branson is a great example of this. He shared some of his insights into how he has successfully launched countless companies, out of which only a handful have failed. The number one reason for success has been the guidance he has given the companies, in addition to the obsessive drive of the founding team.

2. Canadian companies need to invest more heavily in strategic start-ups: Over 25 years ago, most capital came from companies who identified a niche that they were interested in filling but could not do so internally. They would then spin out a division or company, fund it and deploy their top technical staff to develop the technology.  This allowed the start-up to have access to not only funds but, more importantly, critical customer knowledge and channel partners through their close corporate relationship.

3. Global connectivity:For better or for worse, we are globalized, and the centre of commerce has shifted to India and China and Africa and South America are the next emerging destinations where there are huge opportunities. While Brexit poses enormous challenges, significant opportunities will also emerge as the re-aligning of global power centres accelerates. However, we must, as a collective, leverage these connections and establish partnerships with companies in these countries and others.

While MaRS Discovery District in Toronto and Communitech in Kitchener/Waterloo are doing an admirable job of filling some of these requirements for success, many more experienced entrepreneurs need to step up to help create a new generation of global Canadian companies.

Without the elements outlined coming together, among others, I fear that although we may invest in and develop breakthrough technologies, we will continue to see only a very small minority of those ventures actually get to market, and successfully grow to create unique global niches. In essence, we need to question whether our vast investments in applied technology development are being wasted, if we are not able to grow these start-ups into successful world-leading companies.