One summer afternoon in 2021, a veteran Canadian investor booted up his computer and logged into Zoom, as he had done so often for the past 15 months, to listen to a virtual pitch. 

He was taking some time off, but wasn’t so unplugged that he would miss a call from Chris Albinson, the new CEO of Communitech, Canada’s preeminent startup accelerator and tech hub. 

Albinson had just returned to Canada after more than two decades as a venture capitalist in California, where he had invested in startups and mentored Canadian founders abroad. He had some ideas from his time away for how to turn Communitech’s home base of Kitchener-Waterloo, Ont., into Silicon Valley North. The vacationing investor was intrigued. 

At the centre of Albinson’s plan was the True North Fund, a venture capital fund of at least $200 million that would invest in high-growth companies across the country. The fund would be the biggest of its kind in Canada, Albinson claimed.

The investor—who’s also a mentor to entrepreneurs in the Waterloo Region—saw it as a way to clinch Communitech’s relevance in a post-pandemic hybrid world that threatened the accelerator model Communitech had helped establish not just in Kitchener-Waterloo, but across Canada. “Communitech was just trying to figure out a sustainability plan,” said the investor, who spoke on the condition he not be named. “There was a sense that this could be it.” 

Albinson and the investor kept talking in the months that followed. But over time, the investor began doubting Albinson’s strategy for the fund, specifically its focus on national, rapidly scaling companies. “From my standpoint, as a limited partner, this is not really a catalytic fund,” he said. “These are the companies that are successful. … Those companies can raise money no matter how bad the market conditions are.”

In the two years since he returned from Silicon Valley, Albinson has introduced a bold vision for Communitech at a time when accelerators across the country and around the world are grappling with how they can serve startups in a world of distributed and remote workforces, a tech correction and a volatile economy. 

But his strategy, and the True North Fund in particular, has become a point of intense disagreement among those at the accelerator, and within Canadian tech more broadly. What is the point of Communitech? Should it be trying to nurture fledgling local startups, and promote Kitchener-Waterloo as a national and international innovation centre? Or should it be betting on Canada’s most promising companies in the hopes of generating big returns? 

The Logic spoke with nine sources, including local founders, investors and former and current Communitech employees, about the accelerator’s new direction. The Logic agreed not to use their names, for reasons including non-disclosure agreements and concerns that speaking out about an organization with so much political clout could jeopardize government funding and other support for their companies. The Logic also reviewed internal Communitech documents, including five True North Fund pitch decks shared with prospective investors over the past two years. 

Albinson and Catherine Graham, chair of Communitech’s board, declined The Logic’s request for interviews, but in an emailed statement, Albinson—who also sits on the board, and who sent The Logic a response on the board’s behalf—said despite Communitech’s national ambitions it remains focused on the local tech community. “This is not an either-or approach, nor is it new,” he said. 

Some sources agreed the tech hub needs to adapt to survive in a post-pandemic world. Several others pointed to a drop in Communitech membership and high staff turnover as indications something has gone wrong, and argue Albinson’s strategy is alienating the community of entrepreneurs Communitech is supposed to serve. 

“Who is there helping the early-stage companies?” said the prospective investor whom Albinson pitched in 2021. “Who is there helping the entrepreneur that needs mentorship and guidance? There’s a lot of folks that just feel like they’ve been left behind.” 

Some entrepreneurs in town are exploring ways to replace Communitech with a new entity that can better serve the needs of the local ecosystem. Others want to see a change in leadership and direction at the organization that helped put Canada’s tech sector on the map.

“​​I don’t think Communitech hired a CEO,” said the prospective investor. “I think Communitech hired someone who wanted to raise a fund and leverage the Communitech name.”

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You can’t tell the story of Canadian tech without Communitech. It launched in 1997 at the height of the dot-com bubble, when the former manufacturing centre of Waterloo Region was experiencing a surge in new technology companies, on the heels of local success stories like BlackBerry and OpenText. 

The hub’s main purpose in those early days was to bring the region’s tech leaders together to learn from each other. Specialized peer-to-peer groups for executives in finance, engineering and sales, for example, quickly became the cornerstone of Communitech. “Everybody shared shamelessly,” said Vince Schiralli, the organization’s first president, at a breakfast last year celebrating its 25th anniversary. “It was about helping others avoid the mistakes they’d made.”

When the tech bubble burst in the early 2000s, a new cohort of entrepreneurs emerged to start their own ventures. Communitech was there to support them. 

Its physical presence expanded in the ensuing years, as did its services for startups. It now occupies 80,000 square feet in Kitchener’s historic Tannery Building, offering 28 programs to some 1,200 member companies.

As Communitech grew, it went from being 100 per cent member supported to relying on government backing. By 2014, government money made up 76 per cent of Communitech base operations. Then-CEO Iain Klugman wanted to rebalance its income. A former Communitech senior employee who asked not to be named said they were hired in part to double the amount of private funding the organization was receiving. By 2018, private dollars accounted for about 60 per cent of Communitech’s base operating budget, its annual report for that year shows. 

In 2022, amid the fallout from the pandemic, public support again accounted for the majority of Communitech’s $25.6 million in revenue.  

Communitech and other tech hubs have long attracted questions about what actual value they bring to member companies and to the Canadian taxpayers who subsidize them. Former BlackBerry co-CEO Jim Balsillie has been a vocal critic of what he calls the “incubator-accelerator industrial complex.” In a March 2021 briefing note, public servants in the federal innovation ministry laid out a list of concerns about accelerators’ failure “to develop models that do not rely largely on continued support.”  

“There’s lots of events and they celebrate entrepreneurship, and I think that’s great,” said one former Communitech member. “But can I point to a huge benefit that Communitech delivered? I struggled to come up with something.”

From his vantage point in Silicon Valley, though, Chris Albinson saw potential in Communitech. Albinson grew up in Kingston, Ont., and studied computer science and business at Western University before leaving the country for a career as an entrepreneur and venture capital investor. He spent 21 years in the Bay Area, funding startups and mentoring Canadian founders as the co-founder of C100, a network for Canadian tech talent working abroad. 

In an interview published on Communitech’s website after his hire, Albinson described a sense that Silicon Valley “was losing its way,” and that the thing that had drawn him westward two decades earlier was now bubbling up closer to home. “For the same reason I went to the Valley, because it was Mecca, I really, really believe that Canada and Waterloo Region have the opportunity to be the most interesting place on the planet to go and do tech investing,” he said.  

By the time Albinson joined Communitech in May 2021, the acute impacts of COVID-19 were behind the organization and its members. But exactly how Communitech would figure into a tech community transformed by the crisis remained unclear. 

Albinson set his sights beyond Kitchener-Waterloo. He introduced a strategy called Team True North, in which he identified scaling tech firms across Canada whose growth was tracking toward $1 billion in annual revenue—a target he believed Communitech could help them achieve.

His strategy included a venture capital fund with the same True North branding. An early pitch deck dated May 2021—the same month Albinson took over as CEO—describes a vision to raise a pool of capital between $200 million and $350 million to help Communitech build 14 more Canadian unicorns by 2030 using government and private funding, and Communitech’s services and capital.

If public funding for tech accelerators seemed precarious, when Albinson started trying to raise the fund venture capital money was flooding into Canada. Investors of all stripes were piling into the tech sector, seeking massive returns amid historically low interest rates. Later-stage companies on track for big exits—the types of companies the True North Fund would prioritize—were particularly attractive. 

Some local tech leaders saw the True North Fund as a way for Communitech to capitalize on the VC frenzy and help wean the organization off its reliance on government funding. 

“If the fund was a creative way to keep Communitech balanced and to give them a revenue stream that wasn’t so dependent on the political whims of the day, [I would have been] super onboard,” one founder told The Logic. “I was interested in investing because I thought that fund was going to help Communitech.”

But shortly after Albinson started fundraising, local entrepreneurs and business leaders began questioning to what degree the True North Fund would benefit Communitech. 

A prospective limited partner in the fund told The Logic he was under the impression that Albinson, along with anyone else he brought in as a general partner, would reap much of the fund’s returns—not Communitech. That left this investor and several other potential backers unsure about the relationship between the fund and the organization building it. 

That uncertainty extended to Communitech’s ranks. One former Communitech employee told The Logic that almost immediately upon Albinson’s arrival, the fund had become the primary focus for the senior leadership team at the expense of the organization’s existing programs, though it was unclear how much Communitech would benefit from the fund’s returns. “He’s building this fund where he’s gonna make a shitload of money,” they said. “Meanwhile, he has everybody working on non-profit salaries.”

Albinson told The Logic “a very small number of employees” have worked on the fund, and that those workers will be paid through the fund, once it closes, not with government money. 

He said Communitech would collect at least 20 per cent of the fund’s annual management fees, plus 20 per cent of future profits on investments. The remaining profits will go to the fund’s managing partners, which are so far just Albinson and Sean Brownlee, currently a partner at VC fund Rho Canada Ventures. Albinson told The Logic they intend to add “other investment professionals” once the fund closes.

When exactly the fund will close, however, remains a question. “Fundraising in the current economic climate has been challenging,” Albinson told The Logic. “Nonetheless, many forward-looking investors realize the critical need for Canadian growth-stage capital and the importance of laying a foundation now that will support Canadian founders and fuel prosperity well into the future.”

While he originally planned to raise all $200 million by March 2022, according to some of the early True North Fund pitch decks, he told The Logic he’s now targeting a first close, for part of that amount, sometime this year. 

According to a former employee, at one point Albinson had wanted a first close of about $100 million, but another source with direct knowledge of the fund said he is now expected to settle for a $30-million close, led by Export Development Canada. It is likely to be the sole institutional investor in that first tranche of money, the source said. While several institutional investors, including BDC Capital and Venture Ontario, have considered backing the True North Fund, they first want to see it raise a certain amount of money, two sources told The Logic. 

Albinson would not confirm which investors, if any, have committed capital. “Numerous investors have expressed interest in the value and mission of the True North Fund,” he told The Logic. “Since the fund has not yet closed, we are unable at this time to identify any individual or organization that may be considering an investment.”

EDC, BDC and Venture Ontario also declined to comment. 

Other potential backers have reservations of their own.

The prospective investor who fielded Albinson’s pitch while on vacation said his due diligence turned up a number of things that gave him pause. “It’s unclear, the whole mandate of the fund,” he said. 

A review of five pitch decks from across the two years Albinson has been fundraising shows shifts in the True North Fund’s investment thesis. Early decks describe a sector-agnostic, growth-stage fund. More recent material says a third of the fund will be invested in healthtech. A separate deck from this spring highlights a focus on secondary investments, which offer investors equity in a private company by buying stakes from existing investors looking to cash out—particularly attractive in markets, like the current one, where IPOs and mergers and acquisitions are scarce. 

The prospective investor said he was also concerned about Albinson “over-promising.” He said some of the commitments Albinson touted to drum up support from other investors were “very soft,” a conclusion he reached after conversations he had with founders who told him Albinson had used their names to promote the True North Fund to potential backers even though they had not committed money. 

Indeed, while early pitch decks list dozens of local founders and business leaders—including some pictured holding cash—that it claimed were “in” the fund, not everyone the decks named has invested or plans to invest, The Logic has learned. 

One founder was shocked to learn that two pitch decks The Logic obtained, one from May 2021 and another from the winter of 2021–2022, named him among those who were “in” the fund. Not only has he not committed to the fund—nor does he intend to—the pitch deck he himself received that October, around the time Albinson pitched him on investing in the fund, omits his name from the list of the fund’s backers. 

“This is exactly what I suspected they were doing,” said the founder. “I fucking knew it.” Conversations he’s had with other Waterloo Region entrepreneurs have led him to believe Albinson was using their names before they had committed to investing, to get others to invest in the fund. “I was definitely interested [in the fund], but ‘interested’ is not ‘investing,’” he said. “This line that they blur is not cool.” 

A more recent deck lists 27 mentors or founders, down from the 86 supporters cited in earlier versions. The founder is not among those named in this version.

“Moving too fast, we failed to update the footer date as decks were updated,” Albinson told The Logic when asked about the discrepancy. “We apologized for that mistake in the fall of 2021.” 

However, such discrepancies have sown mistrust among some locals. 

One founder, a Communitech member who was approached to invest in the fund, told The Logic he had concerns about potential conflicts of interest, given the organization’s standing among policymakers as a high-profile advocate for local companies. “If Communitech remains the megaphone to Ottawa, and it has a vested interest in picking its own winners, where it has a financial stake in those winners—you’re just really not supposed to do that,” he said. 

Albinson told The Logic that Communitech and the fund have “safeguards” against potential conflicts of interest when it comes to selecting companies to fund. 

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In his statement to The Logic, Albinson pointed out that the True North Fund wouldn’t be Communitech’s first foray into venture capital. In the early 2010s it ran Hyperdrive, a three-month accelerator program for early-stage startups that came with cheques of between $40,000 and $50,000. 

The contrast between that program and the $200 million sought for the True North Fund demonstrates the scale of Albinson’s ambition for Communitech, and his very different vision for what the accelerator can be. In the eyes of some local tech leaders, that vision has come at the expense of Communitech’s role in the community. 

The veteran investor whom Albinson pitched said they aren’t opposed to a Communitech fund, or to the organization thinking bigger in general. “I just think it’s been at the expense of the local situation,” he said. “The core Communitech stuff has fallen by the wayside.” 

Communitech has also struggled with employee turnover. At least 19 senior employees have left the organization in the past two years, according to LinkedIn data, which also shows overall employee count has declined nearly 30 per cent since June 2021, from 252 employees to 180. 

The Logic obtained the results of an internal employee survey from January that shows a drop in morale. Less than 41 per cent of staff said they pictured themselves working at Communitech in a year. Just one-third of staff reported having a favourable opinion of the company’s leadership, down from about two-thirds in 2021, with 40.2 describing their opinion of leadership as unfavourable. Just 32 per cent of staff agreed with the statement, “There is an appropriate level of transparency regarding the changes in our organization.”

Albinson attributed the low morale to a year of disruption: “Pandemic restrictions, adjusting program delivery, a hybrid return-to-office, revenue uncertainty due to the pandemic, layoffs and a leadership transition, among others,” he told The Logic. “The survey results reflected this period of change.” He said the organization is putting in the work to improve.

A former employee who left this year said the services the accelerator offers startups have suffered since the pandemic. One flagship program which helps train startup leaders, for example, is ending this year, after two key staff leading the program left within a month of one another. Albinson told The Logic the “pause” was due to Communitech member companies reducing their training budgets over the past two years.

Overall membership numbers have also dropped since the pandemic. The organization reported having nearly 1,468 members in its 2018 annual report; its website shows it now has 1,200 members.

One Waterloo Region entrepreneur told The Logic there’s now a faction of entrepreneurs trying to find ways to fill the gaps they say Communitech once occupied. Separately, a group of about 40 C-suite executives from local tech companies gathered on June 5 at Catalyst Commons—a co-working and event space in Kitchener that opened during the pandemic—to discuss the challenges startups face and to brainstorm ways to bring the tech community back together in person, the way Communitech had once done. “It’s not anti-Communitech,” said a source who attended the meeting; some Communitech board members were also in the room. “It’s ‘What does the tech sector want or need?’ But anyone reading between the lines will read it as, ‘Has Communitech forgotten about the local sector?’” 

Albinson rejects the assessment that Communitech has neglected the community it helped build. He told The Logic it is “stepping up” in-person activities, and hiring more staff to do so. But the widespread dissatisfaction among employees and in the local community shows it won’t be easy to transform the accelerator into a national VC player while remaining rooted in a community of entrepreneurs.

One current Communitech member told The Logic he nevertheless sees Albinson’s VC experience as an asset to the local community. Albinson’s approach is part of what he sees as Communitech’s renewed focus on founders, where things like corporate partnerships, government policy and community advocacy play a secondary role to serving startups. That, he said, is encouraging. 

Does Albinson’s strategy mean Communitech was paying less attention to local startups in favour of pursuing national winners? He didn’t feel he could assess it yet. But there are no clear answers to big questions about sustainability and impact all Canada’s accelerators are now trying to answer. The member cautioned against the impulse to hold onto the way things were. “We can’t get caught up in staying the same,” he said.