It's been suggested to me that because of Canada's long history of a resource-based economy, Canadian investors are far more accustomed to the long, slow model of: let's research a site for several years, make sure it'll be profitable, build a town, and get to work. The higher risk, fail-fast nature of VC investing is just too foreign to their business model.

One of the problems is the public demands a lower risk investment. A single Theranos would knee cap the entire VC industry in Canada. "How could this be allowed to happen?!" The stories of LPs losing their $50k investments would lead the newspapers for months.

In Silicon Valley its a, 'Oh that sucks, but the smart money stayed away, that should have been a tell for the other investors".

That already happened, to a degree. Canada's dot-com darling was Nortel, which at peak accounted for 1/3 of the total valuation on the Toronto Stock Exchange.

Then the bubble burst and Nortel collapsed. A lot of institutional investors swore off tech after that, and it hasn't really rebounded.

Nortel was an actual fraud though, as well as collapsing as a company. Changing financial reporting rules could prevent another Nortel-style fraud.

Agreed! But that wasn't the message that Bay Street took from it.

And all of the tech was siphoned away by Chinese spies!