Vachon warned Canadian startups in the cybersecurity or artificial intelligence spaces to be wary of receiving money from Chinese venture funds, because of the potential threat to domestic national security. “It will create barriers; it will create questions. It will make it hard for you to sell to markets like the U.S.,” he said in an interview with The Logic’s founder and editor-in-chief David Skok at tech conference SaaS North. (The Logic)

Talking point: There is big money in China’s venture capital market, but growing national security concerns have led to nearly 30 percent fewer VC deals involving Chinese firms in the U.S. between 2018 and 2019, according to data from Preqin. Canada, too, is vulnerable, having not been in China’s good books since its arrest of Huawei CFO Meng Wanzhou at the behest of the U.S. in 2018. A 2019 report to Parliament from the national intelligence and security committee warned that China posed a significant national security threat to Canada particularly by “mobilizing” the business community and students to influence politics. Vachon noted that not all startups need to stay away from Chinese money: “If you’re selling toys, and you want to sell them anywhere in the planet, get money from China—that’s no problem.”