Over the last 15 years working in the cleantech sector, I’ve watched Canada build some remarkable companies. I’ve also watched many of them get acquired. And almost every time it happens, the reaction is the same. “We lost another one.”
The acquisition is often portrayed as a failure. Another Canadian company sold. Another piece of intellectual property leaving the country. Another example of Canada developing great technology only to see others benefit from it. I understand where that perspective comes from. There are legitimate concerns around ownership, decision-making, and the long-term economic benefits that stay in Canada. But I’ve increasingly come to believe we’re asking the wrong question. The question isn’t whether a company gets acquired. The question is what happens next.
Cleantech Sector’s Economic Contribution
Canada’s cleantech sector has become a major economic contributor, supporting more than 224,000 jobs, generating over $43 billion in GDP, and exporting nearly $11 billion worth of products and services each year. We have proven that we can create innovative companies and technologies that the world wants.
The problem is that we often treat an acquisition as the end of the story. In reality, it should be the beginning of the next chapter. When a successful company exits, it doesn’t just create a financial return. It creates capital, experience and relationships. Founders gain liquidity. Investors generate returns. Employees gain experience scaling a company. Leadership teams develop expertise that can only be acquired through actually building a business. Global networks are established with customers, partners, investors, and markets. Those assets are incredibly valuable. In fact, they may be as valuable as the company itself.
IP Is Not Everything
This issue came up recently during a cleantech intellectual property panel I participated in at the inaugural IP PRIME Summit. One of the themes that emerged from that discussion was that innovation ecosystems should not be measured solely by the amount of intellectual property they create. They should be measured by their ability to turn ideas into companies, companies into exports, and exports into long-term economic value.
The same logic applies to exits. A company being acquired doesn’t automatically mean Canada loses. Canada loses when the capital, expertise, and networks created by that success disappear from the ecosystem rather than being reinvested into the next generation of companies. If we look at some of the world’s most successful innovation hubs, that’s exactly what they do differently.
Silicon Valley wasn’t built because companies never exited. Quite the opposite. Successful founders became investors. Early employees launched new ventures. Investors backed the next generation of entrepreneurs. Capital and talent stayed in motion. The ecosystem became self-reinforcing. Canada has many of the ingredients needed to do the same.
We have strong universities. We have talented entrepreneurs. We have world-class technologies. We have investors, accelerators, incubators, and a growing network of organizations dedicated to helping companies scale. What we haven’t done particularly well is build a deliberate system that captures and recycles the value created by successful companies. That’s the real opportunity.
Recycling Capital and Talent
Instead of asking how we stop every acquisition, perhaps we should be asking how we encourage every successful founder to become an investor, mentor, advisor, or entrepreneur again. Instead of focusing exclusively on who owns a company after an exit, perhaps we should focus more on whether the capital generated by that exit is helping create the next generation of Canadian cleantech success stories. Because the ultimate goal shouldn’t be to keep every company Canadian forever. The goal should be to build an ecosystem that continuously produces successful companies.
Canada does not need to win every battle to keep every company Canadian. But we do need to ensure that every Canadian success story helps create the next one. To me, that’s the measure of a healthy innovation ecosystem—not how many companies it keeps, but how many new companies are created from each success.
And that’s a conversation worth having.