Y Combinator CEO Garry Tan<\/a> initially defended the choice on X<\/a>. YC-backed Canadian startups that reincorporated in the US had twice the average valuation as those that didn’t, he wrote.<\/p>\n “There are lots of reasons to build great companies in Canada, and there are lots of great YC and non-YC startups that thrive and are making the Canadian tech scene great,” he wrote<\/a> a few hours later. “Where you are incorporated increases your access to capital. That’s it.”<\/p>\n Tan wrote that “clout farmers” were trying to “make it drama.” The online backlash was indeed swift. Canadian investors<\/a> and founders<\/a> sounded off, and some<\/a> accused the choice of being politically motivated.<\/p>\n \n Every time Henry publishes a story, you\u2019ll get an alert straight to your inbox!\n <\/p>\n \n Stay connected to Henry and get more of their work as it publishes.\n <\/p>\n The development also happened at a time when Canada’s relationship with the United States has fractured over the last year. Canadian travelers are visiting the US less<\/a>, while interest in buying domestically produced goods<\/a> has surged.<\/p>\n Now, YC is reversing course. While the site<\/a> has yet to be updated, the accelerator has since changed its policy to allow Canada-incorporated startups back in.<\/p>\n “We don’t want to suggest that we no longer fund Canadian startups or Canadian founders,” Tan wrote in a blog post<\/a>. “If you’re a Canadian founder, we welcome you to apply to YC.”<\/p>\n Tan wrote that the accelerator chose to remove Canada after it noticed its “top-performing Canadian companies reincorporated in the US.” Incorporating in the US gives founders easier access to investor capital, he wrote.<\/p>\n “We invest in dozens of Canadian startups each year and have hundreds of Canadian founders in our alumni network, including one of YC’s founders, Trevor Blackwell,” Tan wrote.<\/p>\n Blackwell founded the robotics company Anybots and has since retired from YC. Instacart, one of YC’s biggest success stories, was founded by Canadian Apoorva Mehta<\/a>.<\/p>\n![\"Henry](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2026\/02\/686e709085e81483682da489.jpeg\")
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