David Crow explores the institutionalization of founder incubation.
In 2024, Andreessen Horowitz (a16z) announced: “new era“venture capital: the shift to larger funds, deeper specialization and a faster path from idea to scale. With about $46 billion under management spread across growth, infrastructure, seed capital and artificial intelligence (AI) funds, it doesn't just look like a venture at scale. Instead, it looks like something new – an institution that feels partly accelerator, part university, part capital allocator. but this is not the enterprise we knew.
Raising more than $1 million from a pre-seed in Canada is rare. And when this does happen, it almost always requires multiple investors coming together. There's grinding, dancing, endless meetings.
From a Canadian perspective, the contrast is staggering. Raising $1 million at the pre-seed stage here is often a tedious process involving more than 50 meetings, months of polishing and merging multiple checks. In contrast, a16z might invest $20 million in an early-stage company as part of a carefully modeled portfolio. For the founder, $20 million seems like a death sentence. For a company, this is simply portfolio mathematics.
Understanding this difference is important because the next generation of ventures are not just larger funds, but new institutional models of company creation.
a16z scale
A16z does not manage any $20 billion fund. Its roughly $46 billion under management is spread across several vehicles: a growth fund, an infrastructure fund, an artificial intelligence-focused fund, a seed fund and so on. Each has its own limited partnership agreement (LPA), its own management fees and its own investors.
But what matters is the collective strength of the assets under management. Since most LPAs allow for cross-investment, a company that enters through a seed vehicle can later lead a Series A fund and then double down on the growth fund.
So, while you won't find a neat $20 billion “AI fund” on paper, the effect is the same:
- hundreds of bets at the initial stage;
- dozens of Series A sequels;
- several growth-stage companies that could absorb $100 million or more.
At this scale, a venture stops looking like a collection of funds and starts looking like an institutional assembly line for company creation.
Enter Speedrun and YC
This is where things get interesting.
A16z launched into service Speedruna program that invests $500,000 up front with the option to receive another $500,000 if the company raises funds within 18 months. A16z supports about 65 founders in each group and has already invested $180 million in more than 150 companies in five cohorts.
Let's say a16z continues to operate at its current pace and will soon reach 500 invested founders. Do the math and you will see the shape of a funnel:
- 500 founders at $500,000 each;
- According to a16z, about 70 percent receive larger checks (350 companies with $20 million equals $7 billion);
- Few of them end up absorbing $100 million in growth capital.
Y Combinator (YC), of course, has been using its own version of this model for years, with even greater brand equity. Collectively, these programs function as institutional channels for company creation.
The structure is less like a traditional venture fund and more like:
- Entrance fees: Speedrun/YC acceptance;
- Scholarship: $500,000–$1 million to start;
- Syllabus: mentoring, tutorials, investor networks;
- Progress: approximately 20 percent advance to the next stage;
- Holding period: several companies reach $10 billion in revenue.
It's very much like a startup university. Except in this case, intellectual property and ownership remain with the companies, so the results are calculated using venture economics. Founders, investors and the institution itself have advantages.
YC and Speedrun aren't the only ones experimenting with institutional company creation processes. Thiel Scholarship has been running since 2011 and offers young people $100,000 to drop out of college and work on projects.
The lesson is clear: structured, institutionalized programs—whether YC, Speedrun, or Thiel Fellowship—can develop funnels that produce outstanding results. It's not guaranteed, but they can do it at a scale and consistency that traditional seed investing struggles to match.
Why is this important in Canada?
This is where the contrast becomes painful.
According to CVCA/BDC report for the first half of 2025:
- Pre-seed activity amounted to only 47 transactions. total $39 million, with average check size 30 percent below historical norms;
- Seed activity amounted to 86 transactions. total $258 million with an average check size of $3 million, down 29 percent from the five-year average;
- The 68 early-stage deals totaled $908 million, down 47 percent from last year.
These numbers paint a clear picture: Raising more than $1 million from a pre-seed in Canada is rare. And when this does happen, it almost always requires multiple investors coming together. There's grinding, dancing, endless meetings.
In contrast, Speedrun writes a single check for $500,000 from one sponsor, without any dancing. This is done for hundreds of founders with a clear path to $20 million and beyond.
This has two big consequences:
- Risk of talent flight. If Speedrun and YC become the starting point for ambitious founders, Canada risks losing its best entrepreneurial talent to US institutional funnels. Our local foundations simply cannot match the speed, reliability and scale of these programs.
- Adaptation of the capital market. Canadian investors will have to rethink their role. Do we specialize and collaborate with these institutions, feeding into their pipelines? Or do we create our own equivalents—CDL, Next Canada, or Pan-Canadian AI Institutes 2.0—but with a built-in venture economy?
In any case, the soil is changing.
Looking to the future
Here's an analogy that stuck with me.
In the past, ambitious graduates invested in themselves by going to graduate school. They spent $100,000 on an MBA, law, or medical program to become successful.
Today, ambitious people can choose YC or Speedrun instead. In lieu of tuition, they receive between $500,000 and $1 million. Instead of ratings, they are judged on deadlift. And instead of a diploma, the reward is a chance to build a company that changes the world.
YC and Speedrun are not just accelerators; These are new professional venture business schools.
Whether Speedrun is intended as a pipeline or a new way to think about software and markets, the effect is the same: it creates a structured way to discover and scale the next generation of great companies.
For founders, this is no better or worse than traditional seed markets; it's just a different game design. One that will be faster, more programmatic and more institutional.
And for Canadian founders, it may be the most powerful new path yet. Because, at the end of the day, YC and Speedrun represent more than just capital: they are the modern equivalent of a university or research laboratory, rebuilt for the era of commercialization.
This may be the most powerful way we've ever seen to find and fund the next world-changing company builders.
David Crow runs the strategic advisory firm Danger Capital Corporation. His 25-year career also includes work with OMERS Ventures, Influitive and Microsoft.
Artistic image provided by Paul Miller, under license CC BY 2.0.
Update (9/17/25): This story has been updated with additional Speedrun performance data from a16z.
