You would think it would be that simple, but you really need to look at it from the investor's point of view: What is my ROI if invest my money this way instead of that way? More unattractive investments won't help the tech startup community grow.
My suspicion[1] is that the thing that will really fix this is changing the way that investors are taxed on their capital gains and losses.
[1] Been a while since I lived in Canada, but IIRC capital gains and losses are not taxed like they are in the US.
That's not correct. Interest is taxed progressively like any other income, dividends are somewhat taxed according to a complex formula, and 50% of your capital gains are taxed at the applicable marginal tax rate depending on your income.
True, but that is an exemption that gets used up. There is a $750,000 lifetime capital gains exemption. Which most people don't hit, but a successful founder could.
My suspicion[1] is that the thing that will really fix this is changing the way that investors are taxed on their capital gains and losses.
[1] Been a while since I lived in Canada, but IIRC capital gains and losses are not taxed like they are in the US.