What does the Toronto startup ecosystem look like? (V4)

This document focuses on the high-tech and software startup ecosystem, and outlines the different types of organizations comprising the ecosystem, whose scope is global.  This is not a detailed listing of every ecosystem member. So far, I have identified 25 different types of organizations.

The core of the ecosystem are the founders.  Founders start with an idea.  They create a MVP (Minimum Viable Product) which satisfies some early customers.  Then, they refine the MVP until there is product/market fit. (Current customers recommend the product and there is a large pool of potential customers who have problems that can be solved by the startup’s solution.)

#1 Incubators and accelerators

There are a broad range of incubators and accelerators and almost every one is different. As a startup evolves, it may move among several different types of incubators and accelerators.  Incubators and accelerators focus on startups where can have maximum impact by utilizing admittance criteria and processes. Common characteristics of incubators and startups are:

  • Links to investors.
  • Access to lawyers.
  • Access to mentors and advisors.
  • Networking with other startups.
  • Financing is sometimes provided.


The goal of an incubator is to help take a start-up to the point where there is a MVP (Minimum Viable Product). The process takes 12 to 24 months.  The founder decides what incubator resources to draw upon and at what time.

The key characteristic of an incubator is co-located office space with other start-ups.


The goal of an accelerator is to quickly grow the size and value of the startup to enable future funding. The key characteristic of an incubator is taking a start-up company (which already has a Minimum Viable Product) through a very structured 3-4 month process. Actions and outcomes are required every 1-2 weeks.

As of Sep 3, 2019 Toronto has:1

  • 29 pre-incubators.
  • 63 incubators.
  • 54 accelerators.

#2 Venture studios

A venture studio comes up with an idea, assembles a team of founders, and provides capital for the startup.

#3 Angel investors

There are individual angel investors as well as angel investor groups. Angel investor groups have government supported infrastructure (e.g. staff, office space), but the government does not provide capital to startups applying to the angel investor groups.  The capital comes from the angel investors.

As of Sep 3, 2019, Toronto has 216 investor organizations and companies.1

#4 Crowdfunding platforms

Investors make small online contributions.  There are two types of crowdfunding:

  • The investor does not get equity. Their return is a future product or service.
  • The investor does get equity. Any investor living in Toronto may invest up to $2,500 into a crowdfunding equity investment, with a limit of $10,000 per year.  Accredited investors may invest up to $25,000 at one time into a crowdfunding equity investment, with a yearly limit of $50,000.

#5 Pre-seed or seed investors

The goal at the pre-seed stage is to demonstrate that the solution meets a market need.  Pre-seed investors expect the following outcomes at the end of the pre-seed stage:

  • There is a MVP (Minimum Viable Product being used by some delighted customers with some revenue.
  • There is documented product feedback).
  • The team with the necessary skills has demonstrated that they can work together.
  • There are documented experiences with customers which provide facts regarding potential market size and market demand.
  • Conversations with distribution channels and partners have started;

The goal at the seed stage is to demonstrate that the potential market is large and that there is strong demand for your solution.  Seed investment is used to transform the initial MVP into a solution which customers from a large market will demand.

#6 Series A, B investors

At the series A stage, the founders believe they have product/market fit, and the investors believe the startup has both product/market fit and the potential to scale. Key investor questions are:

  • Who are customers and how will they be cost-effectively reached?
  • How will you make money and predictably grow?

Debt financing becomes available from debt investors.  At the series B stage, the startups have been successfully scaling. Debt equity continues to be available.

#7 Post-series B investors

Both equity and debt funds exist.

#8 Niche market investors

There is at least one investor targeting profitable startups focused on a niche market they dominate.

#9 Investment dealers/underwriters

Sartups can raise equity by listing on the CSE (Canadian Securities Exchange), or on the TSX Venture Exchange.

#10 Organizations to sell your startup

These organizations will help you sell your startup, once it’s achieved some success.  They can also help you buy other companies.

#11 Talent development programs

Some organizations train people, to enable them to be hired by startups.

#12 Outsourced or offshore talent providers

Many startups have offshore software development teams, or use outsourced resources for part-time or specialized needs.

#13 Talent acquisition

This includes job boards and companies which enable Toronto startups to hire people from outside Canada and relocate them to Canada.

#14 Associations

There are associations focused on specific types of members e.g., VC (Venture Capital), accelerators, startup CEOs, startup CTOs, etc.

#15 Advisors – legal, financial, functional

Every startup requires a range of advisors.  For example, financial software can collect and report on a board range of information.  An accountant can advise on how to set the software up.  Lawyers are key to providing advice on the range of legal and regulatory requirements, and how best to meet them.

#16 Startup operational services

These SaaS (Software as a Service) companies provide operational services needed by startups e.g., finance and financial reporting (cash flow, profit and loss, balance sheet, etc.), CRM (Customer Relationship Management), help desk, payment processing, etc.

#17 Reviews of startup companies

Some companies are focused on reviewing startup solutions.  Other companies enable reviews of startups as a sideline to their main business (e.g. job boards enable employee reviews of the CEO).

#18 Conferences

Conference organizers manage Toronto conferences focused on startups.  Many of the organizations in the Toronto ecosystem also host events.

#19 Regulators

Every startup needs to be aware of regulatory requirements as soon as they start raising capital.  Financial Services startups must be compliant with many more regulatory requirements.

#20 Federal government programs

Startups can benefit from tax credits, financing, and advisory support. When going global, Canadian trade commissioners are based in 160 global cities.  The startup Visa program enables a foreign employee with a job offer to quickly obtain a visa to work in Canada.

#21 Ontario government programs

The Ontario government has numerous programs, including the funding of the infrastructure for angel groups.

#22 Municipal programs

Many cities have their own programs.

#23 Ecosystem researchers

Facts about startups are available in databases.  Some organizations conduct and publish fact-based research regarding startups.

#24 Startup charities

The Upside Foundation focuses on startup companies donating stock options.

#25 Coworking space companies

Once the startup leaves the founders’ homes (or accelerator) they move to a coworking space. These companies also enable a startup to quickly establish a global physical presence.

As of Sep 3, 2019 Toronto has 73 co-working space organizations and companies.1


1 Startup Here Toronto   https://startupheretoronto.com/startup-support/