Canadian startups often undervalue intellectual property, leading to lost economic opportunities and the erosion of national innovation capacity. Adam Froman, founder and CEO of Delvinia, argues that IP should be viewed as a core financing and growth instrument rather than an afterthought.
- IP is a critical financing and growth lever for startups.
- Rising foreign acquisition of Canadian patents threatens local scale-ups.
- Government policy must better support IP-based growth and retention.
What happened
Adam Froman, CEO of Canadian tech firm Delvinia, has raised concerns about the widespread misunderstanding among Canadian founders on the practical use of intellectual property (IP). While startups recognize their innovations, few use IP strategically as a financing and valuation tool. This disconnect has contributed to a significant transfer of Canadian patents to foreign entities between 1998 and 2017, undermining local innovation and economic potential.
Froman's experience with Delvinia’s platforms AskingCanadians and Methodify illustrates a different approach. By embedding IP strategy into business operations from the outset, they leveraged government programs like SR&ED and IRAP to fund R&D, improve valuation, and maintain ownership. This enabled them to grow and eventually sell on their own terms without relying on venture capital.
Why it matters
The erosion of Canadian IP ownership impacts the country’s ability to nurture homegrown companies that can compete on a global scale. Founders often feel forced to choose between selling their IP early to foreign buyers or attempting to scale internationally—yet IP itself is the key asset that enables growth and global reach. Selling it prematurely forfeits the core value and growth potential of the company.
Froman argues that current innovation funding policies and banking practices are insufficient to support knowledge-based companies. Without integrating IP strategy requirements into government programs and adapting financial institutions’ risk assessments to recognize the value of proprietary technology, Canada risks continuing to lose crucial assets abroad.
What to watch next
Froman proposes three government-led priorities: first, require that all companies accessing R&D funding demonstrate an active IP strategy, not just R&D activities; second, reform banking frameworks to treat knowledge-based businesses with proprietary IP as strong credit risks deserving support; and third, implement loan guarantee programs explicitly linked to IP retention to incentivize founders to preserve Canadian ownership.
How these measures develop will be critical in determining whether Canadian startups can retain control over their innovations and successfully scale domestically. The coming years will show if policymakers heed calls to rethink and strengthen IP’s role in Canada’s economic growth strategy.