The Yale Model, created by David Swensen, changed how big institutions invest. Instead of just stocks and bonds, Yale put most of its money into things like venture capital, private equity, and real estate.
This strategy paid off: over the last 20 years, Yale’s investments returned an average of 10.3% per year. As a result, Yale’s endowment grew from $1 billion in 1985 to $41.4 billion in 2024—about 3% better per year than most other college endowments.
Canadian universities and pensions manage tens of billions, but invest less than 1% in early-stage ventures. While U.S. schools like Yale funded companies such as Google and Airbnb, Canadian capital often stays in safer investments like bonds.
If Canadian institutions invested just 1% into venture funds, it could mean hundreds of millions (at the very least) for homegrown startups. Steps could include:
Institutional venture funding helps build a strong innovation ecosystem. At Yale, endowment returns support research, scholarships, and community programs. Adopting a similar approach could help Canada grow its own tech leaders and boost long-term financial health.