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Why is Canada Giving Less Seed Capital to Women, Innovators, and Start-ups?

Although there has been much debate on this topic, there is certainly a good argument to be made that suggests women, innovators and start-ups are being avoided, or at least treated unfairly, by Canadian suppliers of capital (i.e. banks, trust companies, etc…). Referring to the 2007 Survey on Financing Small and Medium Enterprises done by Statistics Canada, this financing gap argument is easily seen in the following segments:

Businesses owned by women: Only 62% of businesses owned solely by women have their loan requests authorized. Compare this with businesses owned solely by men, which received authorizations on as many as 88% of their loan requests.

Smaller Businesses: Businesses with between 1 and 4 employees had only 86% of their loan requests authorized, while businesses with 100 to 499 had as many as 97% of their loan requests authorized.

Innovative Businesses: Businesses with R&D expenditures greater than 20% had only 79% of their loan requests authorized. Non-innovative businesses with no R&D expenditures had as many as 87% of their loan requests authorized.

In this day and age, and especially in an economy that is in such need of a kick-start, it is staggering to think that we are still putting hurdles around the segments of the market that could very well lead us into our next growth phase. Entrepreneurs have enough of an upward battle as it is, let alone unfair treatment such as this.

We’d love to hear from such entrepreneurs who have experienced these obstacles, to see if we can do something about it!


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