Seed and Series A Fundraising: Canada or the United States?

In short: a seed round is mostly raised in Canada, from investors who know your market, while a Series A can open up to US funds if your US traction justifies it. Either way, what makes the difference is the quality of your metrics, the clarity of your story and a flawless data room, far more than where the investor is based.

The Canadian venture capital market remains active but selective. According to BDC's venture capital report, about $7.9 billion was invested in Canada in 2024 (revised to $8.5 billion by the Canadian Venture Capital and Private Equity Association). In Quebec, Réseau Capital counted about $1.0 billion across 122 venture capital deals in 2025. Investors are still writing checks, but they demand more proof than they did a few years ago.

Seed vs. Series A: very different expectations

Criteria	Seed	Series A
The investor's question	"Can this team find its market?"	"Can this growth engine scale?"
Proof expected	First customers, usage, fast learning	Demonstrated product-market fit, steady growth, unit economics
Use of funds	Reaching product-market fit	Building the go-to-market and the team
Typical investors	Angels, seed funds, accelerators, public funds	Institutional venture capital funds
Common instruments	SAFEs, convertible notes, preferred shares	Preferred shares with a full shareholders' agreement

To find out whether you're ready for a Series A, revisit our article on product-market fit signals.

Raising in Canada: strengths and limits

Strengths

• An ecosystem that knows your market: angels (for example, Anges Québec) and Quebec and Canadian seed and venture capital funds.
• Public and quasi-public investors: BDC Capital, Investissement Québec, labour-sponsored funds and several regional funds.
• You keep your tax advantages: a Canadian-controlled private corporation (CCPC) retains access to the enhanced refundable SR&ED tax credit.
• Complementary non-dilutive funding (see our guide to grants and tax credits).

Limits

• Rounds are often smaller than in the United States at the same stage.
• Fewer funds are able to lead large Series B and C rounds.
• Greater risk aversion, which sometimes translates into more conservative valuations.

Raising in the United States: what it involves

• An expected structure: most US funds prefer to invest in a Delaware C-corp, which often means a Delaware flip (see our US expansion guide).
• Proof of US traction: US customers and revenue are more reassuring than market share in Quebec.
• A presence on the ground: in-person meetings, network, an executive based in the United States.
• Standardized documents: the NVCA model documents and Y Combinator's post-money SAFE are the benchmarks.
• Higher legal costs, with lawyers in both countries.

Preparing your raise: a six-step method

1. Set the amount and the time horizon

Raise enough to last 18 to 24 months and hit the milestones that will justify the next round. Start from the milestones, not from an arbitrary number.

2. Build the narrative

Problem, solution, market, traction, business model, competition, team, use of funds. Every slide should answer a likely investor objection.

3. Set up the data room

• Financial statements and 24- to 36-month projections
• Key metrics by cohort (recurring revenue, retention, CAC, gross margin)
• Up-to-date cap table, including options and convertible instruments
• Incorporation documents, shareholders' agreements, material contracts
• Intellectual property: founder and employee IP assignments, patents, trademarks
• Compliance: privacy (Law 25, GDPR if applicable), security, customer contracts

4. Target the right investors

Build a list of 40 to 80 funds aligned with your stage, sector and geography. Prioritize warm introductions (referrals from portfolio founders, lawyers, other investors).

5. Run a tight process

Bunch your meetings into a few weeks to build momentum. Track every conversation in a spreadsheet and follow up systematically.

6. Anticipate dilution

Model the round's impact on your cap table before you negotiate: conversion of SAFEs and convertible notes, the option pool expansion the investor will require, and projected cumulative dilution through Series B. Founders who know these numbers negotiate with more confidence and avoid unpleasant surprises at closing.

Term sheet terms to watch

• Pre- and post-money valuation, and the size of the option pool.
• Liquidation preference (1x non-participating is still the most founder-friendly standard).
• Protective provisions (vetoes) and board composition.
• Anti-dilution provisions (broad-based weighted average is the most common).
• Founder vesting schedule, if it's being reinstated.

The metrics investors look at first

Metric	At seed	At Series A
Recurring revenue (MRR/ARR)	First revenue, trend	Steady growth, quarter after quarter
Retention	Signs of repeat usage	Stable cohorts, strong net revenue retention
Gross margin	Credible trajectory	Close to industry standards
Customer acquisition cost	First measurements by channel	CAC and payback period under control
Burn rate	18 to 24 months of runway	Capital efficiency (growth per dollar spent)
Team	Complementary founders	Leadership able to scale the company

Prepare a one-page summary of these metrics, with their definitions: consistent definitions matter as much as the numbers themselves.

After the raise: the first 100 days

A successful raise isn't the finish line; it's the start of a new relationship of trust with your investors.

• Communicate: a concise monthly or quarterly update (metrics, highlights, challenges, asks).
• Roll out the use-of-funds plan without rushing: key hires first, then accelerate the channels that work.
• Put governance in place: board calendar, committees, shared dashboard.
• Start preparing the next round now: identify the milestones that will justify it and track progress against them.

Mistakes that sink a raise

• Starting to raise with less than 6 months of cash.
• Pitching a vision without metrics, or metrics without a vision.
• Doing the Delaware flip before you have a committed US investor.
• Neglecting the cap table (poorly modeled convertible instruments).
• Leaving the founder to run both the raise and the company alone, with no operational backup.

How SFB Consultants helps you prepare your raise

Sandra D'Orazio supports founders as they prepare to raise: clarifying milestones, structuring the narrative and metrics, preparing the data room and coordinating with lawyers and tax advisors. Learn more about our startup growth services, and our international expansion services if your raise goes hand in hand with entering the US.

Planning to raise in the next 6 to 12 months? Book a 30-minute discovery call with Sandra to assess how ready you are and build a realistic timeline.