Written By Raissa Espiritu & Hilary Kilgour, Audaxa Ventures in Collaboration with The National Bank Investor Hub at Platform Calgary

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This is the sixth chapter in the Uncharted Capital series - a collaboration between Audaxa Ventures and Platform Calgary designed to equip emerging fund managers with grounded insights and real conversations across the ecosystem from the people shaping the next generation of Canadian venture funds.

Over the past year, we’ve explored the realities of fund building in Canada: how to design a thesis that actually reflects your edge, how to construct a portfolio that makes sense in this market, how to engage diverse founders in ways that are meaningful and not performative, how to measure impact without falling into the traps of vanity metrics, and what emerging managers needs to know about securities law. Each piece has been rooted in research and what managers, LPs, and ecosystem builders told us behind closed doors of the things rarely said out loud.

The content across this series was shaped and informed through roundtable discussions, many more one to one conversations, and research deep dives, the biggest takeaway is unmistakable. Emerging managers and micro funds matter. Their focus on early stage venture is catalytic. They sit closest to founders. They see opportunities others overlook. They take risks large funds cannot. And they expand who gets funded and what gets built.

Yet they are operating in a system that is making the work increasingly difficult.

• North American data shows that GPs are raising more small funds than ever before. As of 2024, 69% of new funds were under $25M dollars, a clear sign of a shift toward smaller, thesis driven vehicles Carta 2025. 
• A global analysis of more than eight hundred emerging GPs shows that a younger and more diverse generation of managers is entering venture at the fastest rate recorded VC Lab 2.0 2024. 
• However, the fundraising environment is deteriorating. US emerging managers raised only $17B last year, with analysts describing the climate as “disastrous.” Bloomberg 2025. 
• PitchBook reports that only one third of first time managers from 2021 have successfully raised a second fund, and only 12% of those who raised in 2022 have done the same PitchBook 2025.
• Despite clear performance evidence that smaller funds often outperform, institutional allocators continue consolidating capital into the largest funds Crunchbase News 2025.

The fundraising environment for new and emerging funds is difficult not just in the United States and Globally, but in Canada as well. According to recent industry data, only 17 Canadian venture capital funds raised approximately $2 billion in 2024, a decline in total dollars raised and in average fund size compared to prior years, underscoring the challenges of closing new funds in today’s market. BetaKit

Furthermore, industry reports suggest that the number of new Canadian VC funds closing in 2024 hit a decade low, highlighting a fundraising slowdown that disproportionately impacts emerging managers trying to establish track records and build momentum. The Logic

LPs have also signaled caution. Commentary from legal and industry sources notes that Canadian and international limited partners are hesitant to make commitments to new VC funds without clear evidence of traction, which can lengthen fundraising cycles and raise the bar for first-time and smaller GPs. Osler, Hoskin & Harcourt LLP

At the same time, the median time to fundraise for second funds remained elevated, and the pool of emerging managers — although growing in number — is operating in an environment where capital is tighter and expectations remain high. BDC.ca

Across the conversations and research that informed this series, a clear pattern emerged. Emerging managers are seeing more founders, more climate and health innovation, and more cross-regional deal flow than ever before. What has not kept pace is the capital market around them. Canada has the ingredients to lead in early-stage venture, but it has not yet built the coordinated support systems required to make that leadership durable.

Canadian LPs reinforced this pattern in our most recent Uncharted Capital roundtable session. Lars Boggild from Realize Capital shared that roughly 60% of all new fund proponents they engaged with since mid 2023 were emerging managers, more than one hundred across Canada. Yet very few reached their fundraising targets, and most struggled with capital access, not capability.

He also noted that the Canadian private LP market is fundamentally not deep enough to support the growing number of new funds, and that the operational runway remains one of the biggest threats to emerging manager survival. Realize has already begun deploying non repayable operational capital and shared service support for managers, an early example of the type of scaffolding the ecosystem needs at scale.

Christiana Manzocco from Alberta Enterprise Corporation (AEC) pointed to another structural challenge. The earliest stages of company building remain undercapitalized. Many funds that identify as pre-seed or seed eventually shift up market once operational realities set in, leaving a significant gap in early stage sophistication. Without funds that can invest alongside angels, normalize terms, and guide founders into a real Series A pipeline, regional ecosystems stagnate.

She also highlighted that micro funds face institutional constraints that many cannot meet, including management fee sufficiency, audits, reporting, and the ability to support two full time GPs. The issue is not talent or deal flow. It is capacity and budget.

Taken together, these insights reveal a clear paradox. Canada needs emerging managers more than ever, yet emerging managers face structural barriers that make it difficult to raise, operate, and deliver on their potential. 

“Emerging fund managers are usually closer to the entrepreneurial pulse… they invest earlier, write smaller checks, and are often the first champions who help founders build from the very beginning.” 

-Tracey Scarlett, Executive Director of VCAA

The purpose of this chapter is to name that tension, understand what we learned across six sessions, and outline what must change. 

Which brings us to the throughline of this series.

Everything we heard over the past year can be traced back to six shared themes that reveal both the opportunities and the obstacles that will shape the next decade of early stage venture in Canada.

What We Heard Across Six Sessions

These themes matter not only because they describe the lived experience of emerging managers, but because they reveal the structural gaps holding back regions like Alberta from reaching their innovation potential. If we want to grow Canadian venture from the ground up, these are the constraints we must directly address.

1. Deal flow and inclusion are still structurally underbuilt

No one in the room (across any of our six sessions) felt they had a strong pipeline of diverse founders handed to them. Every investor admitted that sourcing remains overly dependent on existing networks. Founders, especially women, racialised, and newcomer entrepreneurs, shared that they often lack clarity on valuation, storytelling, and how to get to a real lead.

The consistent message:
You cannot activate capital without activating deal flow.
Pipelines need to be intentional, visible, and shared, not an afterthought.

2. Emerging managers need infrastructure, not just encouragement

Many first time funds in Canada fall under $25M. At this size, management fees cannot sustain the operating capacity LPs implicitly expect. Managers are fundraising, building a platform, doing diligence, creating reporting systems, and supporting founders, often with almost no staff.

What emerged clearly this year is that the performance data does not justify the structural neglect. RBCx and others show:

• The majority of new Canadian VC funds are now under $25M
• These micro funds have produced some of the strongest median net IRRs in the market
• Micro funds (<$25M) posted median net IRRs near 24 percent, compared to ~10 percent for funds over $100M

The point is not that small is inherently better. It is that emerging managers are demonstrating strong performance despite operating without the support structures available to large funds.

Canada needs operational scaffolding around them: shared services, reporting templates, legal guidance, warehousing mechanisms, and data frameworks.
The talent is here. The infrastructure is not.

3. Fund models must reflect local and sector context

One of the clearest themes was that Canada is not a single market. What works in Toronto does not map neatly onto Calgary, Atlantic Canada, the North, or communities building solutions from very different economic realities.

The exit landscape in Alberta is different from the one in Vancouver. Climate and health pathways differ from pure software. Capital efficiency varies regionally, something RBCx data highlighted in its analysis of Canadian exits.

The lesson:
Fund design must be grounded in the actual context you’re operating in — not in a generic model imported from somewhere else.

4. LP–GP trust is the real currency

Every allocation, especially to new managers, is ultimately a trust decision. LPs want clarity on governance, pacing, reserves, reporting discipline, and value creation. Yet many emerging managers described the experience of navigating LP expectations as trying to hit a moving target.

A major source of friction is that many LP benchmarks were designed for mature funds in larger markets, not for early stage micro funds in Canada. LPs still reference:

• 20 percent net IRR
• 2–3x net DPI
• 10–12 year distribution timelines

But Canadian market data does not support these uniformly. BDC’s recent numbers show one and three year IRRs have been negative, with ten year IRRs around 10%. GIIN’s benchmarks show most impact funds meet or exceed expectations, but the targets and timelines look different depending on strategy and geography.

This does not contradict the strong performance of micro funds. It highlights a deeper issue:

Emerging managers are often outperforming on a relative basis while being measured against metrics that do not reflect Canadian realities or early stage fund structures.

We need alignment around what the data actually says, not around inherited expectations that distort the assessment of emerging managers.

5. Strategic capital has a different logic, and emerging managers can fit it well

Strategic investors like RBCx reinforced that they look for both financial outcomes and alignment with customer needs, product pathways, and innovation priorities. They want GPs who understand the sectors they operate in, not generalists repeating venture tropes.

This creates an opening for specialised, thesis-driven, regionally grounded funds, especially in climate, health, deeptech, and infrastructure. The bar is clarity, coherence, and proximity to real problems.

6. Canada’s ecosystem is fragmented — we need connective tissue

Canada does not suffer from a lack of capital or talent. The ingredients are here: founders, emerging funds, Indigenous and community finance, philanthropic capital, family offices, corporate strategics, and public investors. What we lack is the connective tissue that allows these pieces to work together.

Across our sessions, fund managers and LPs described an ecosystem where each actor operates in its own silo. Founders struggle to find aligned early-stage capital. Emerging managers struggle to find LPs. LPs struggle to find trusted pathways into new funds. Corporates struggle to connect innovation priorities with investable opportunities. Indigenous and philanthropic capital often sit adjacent to, rather than inside, the venture pipeline.

As one participant put it, “we are not talent-constrained; we are connection-constrained.”

Other markets have built intentional linkages: shared infrastructure, national programs for new LPs, coordinated fund strategies, and mechanisms for blended capital. Canada has not.

The question, then, is no longer whether we have enough capital.
It is whether we can build the infrastructure that links capital to the emerging managers and founders who can deploy it where it matters most.

Bridging to the Intention to Impact Playbook

The themes in the Uncharted Capital series mirror what we learned while developing the From Intention to Impact: A Playbook for Alberta’s Family Offices and Foundations. Both bodies of work point to the same truth. Canada is not constrained by a lack of capital or a lack of talent. It is constrained by the absence of clear pathways that connect purpose driven capital to the managers and founders who can turn that intention into measurable outcomes.

Family offices and foundations told us they want to deploy catalytic, place based, and justice aligned capital. Emerging managers told us they are closest to the problems we need to solve in climate, health, and inclusion, but lack the operational scaffolding and LP pathways necessary to deploy their expertise at scale.

Together, these two pieces of work reveal a shared opportunity: Emerging managers are the missing link between intention and impact.

Strengthening them strengthens the entire capital continuum. It is how Alberta and the nation can move from aspiration to execution.

What We Built

The five Uncharted Capital thought pieces were designed to fill specific gaps fund managers identified:

1. Essential Guide for New Fund Managers: Navigating the Evolving Venture Landscape and Building a Values-Aligned Fund

A practical entry point for thesis, structure, compliance, and the emotional dynamics of Fund I.

2. Portfolio Construction & Fund Model: Designing a Capital Deployment Model That Actually Works for New Fund Managers

Demystifying pacing, reserves, ownership, and how to make the math work within a Canadian or regional context.

3. Accessing & Engaging Diverse Founders: Building Pipelines That Unlock Overlooked Value

A framework for making inclusion part of the pipeline, not an afterthought.

4. Measuring Impact & Financial Performance: Defining ROI in Impact Investing

Translating global standards and GIIN benchmarks for emerging Canadian funds.

5. What Emerging Managers Need to Know About Securities Law
   Plain language guidance to reduce risk and increase confidence.

Together, these now form the spine of a national emerging manager playbook. Not a static manual, but a shared reference point built from the lived experiences of GPs, LPs, and ecosystem builders across the country.

Why we started Uncharted Capital?

Uncharted Capital began through conversation. After sharing our own experiences navigating the challenges of raising a venture fund, we began hearing from other emerging managers across Canada who were grappling with the same questions and constraints.

For us personally, Audaxa Ventures is led by a diverse leadership team, who have built companies, raised capital, and now invest, many of these challenges were familiar. We have lived from multiple sides of the table and have an understanding of how often capital flows through pattern recognition, how easily lived experience is discounted as risk, and how difficult it can be to translate proximity to real problems into something the market recognizes as investable.

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We saw people raising first funds while simultaneously trying to build deal flow, establish governance frameworks, articulate their thesis to LPs, and operate within an ecosystem that was never designed with micro-funds or diverse managers in mind.

At the same time, a different reality was becoming increasingly visible. Founders working at the intersection of climate and health. Indigenous, newcomer, women, and racialised entrepreneurs building solutions rooted in lived experience. Deep technical and sector expertise emerging outside major urban centres. These founders were not short on ambition or insight. They were short on capital that understood their context and showed up early.

Emerging managers are often the ones closest to these founders and communities. They are more likely to invest earlier, write the first checks, normalize terms, and build trust where traditional capital has not shown up. In doing so, they expand who gets funded, what gets built, and which problems are considered investable in the first place.

Uncharted Capital began because too many emerging managers were navigating this journey alone. What the past year has made clear is that they are not marginal players in the future of Canadian innovation. They are central to it.

• They are closest to founders.
• They see what the market misses.
• They build where others hesitate.
• They create value the ecosystem relies on but rarely acknowledges.

Emerging managers are already shaping what comes next. With the right support, infrastructure, and community, they have the potential to reshape not only early-stage venture, but the flow of capital into underrepresented founders and communities across the country.

The next chapter is unwritten. We invite those who believe in the importance of inclusive, resilient innovation, and the potential of emerging managers to help write it.

What’s Ahead

The past year surfaced several priorities that can guide the next phase of this work. They are not the final answer. They are the groundwork for a national agenda that others will help shape and strengthen.

The insights were remarkably consistent.

Emerging managers do not need more inspiration. They need infrastructure, connection, and incentives that reflect the realities of building a first fund in Canada. The insights across all six sessions pointed to a simple truth: capital formation at the early stage will not strengthen without deliberate systems that support the people closest to founders and closest to overlooked markets.

Looking forward, Uncharted Capital will focus on building that missing infrastructure. This includes publishing a national playbook for emerging managers, creating a community of practice to replace isolation with shared problem solving, launching a Capital Activation Lab to grow Canadian LP readiness, advancing a national agenda for incentives and policy, and committing to the data and insights that shape credibility and investment decisions.

These priorities begin to answer that call.

These next steps are not the final answer. They are the foundation for a stronger, more connected, and more investable emerging manager landscape in Canada. 

If you are interested in partnering or supporting what comes next, please reach out to Raissa at raissa@audaxaventures.com and/or the National Bank Investor Hub at nbih@platformcalgary.com.

About Platform Calgary and the National Bank Investor Hub

Platform Calgary is a non-profit, community-based organization with a mandate to bring together the resources of Calgary's tech ecosystem to help startups launch and grow at every step of their journey, from ideation to scale. The National Bank Investor Hub at Platform Calgary is a dedicated space designed to bridge the gap between investors and Calgary’s high-potential startups, accelerating growth and innovation. Through this strategic initiative, we foster faster connections between investors, founders, and capital, driving Calgary’s tech ecosystem forward. 

About Audaxa Ventures

Audaxa Ventures is a venture capital fund backing the most promising technology solutions at the intersection of climate and health. 

We prioritize investments that not only improve the world and our communities but also provide our portfolio companies with the market access needed to expand their ventures and foster growth. We focus on women and non-binary founders who bring lived experience, diversity of thought, and bold approaches to solving some of society’s most urgent challenges. With a commitment of impact-driven capital, we prioritize return on impact alongside financial performance, supporting founders who are building companies that deliver measurable outcomes for people and the planet.

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