If there were two words to describe the Canadian startup landscape in 2013, it would be “encouraging” and “evolving”.

There was plenty of enthusiasm as more entrepreneurs jumped into the fray – undeterred by the risk, competition and shortage of capital.

Regardless of where you stand on quality versus quantity, there has never been more entrepreneurs taking the plunge. This activity can be seen across the country.

So let’s look at the different parts of the startup ecosystem:

1. Entrepreneurs: There are plenty of entrepreneurs who have caught startup fever. Many of them have little or no shot at success but they’re gaining valuable experience, which will play a key role in the ecosystem’s maturation.

As important, serial entrepreneurs such as Dan Debow are enjoying financial success, which is being invested in the startup ecosystem. There are also entrepreneurs such as Hootsuite’s Ryan Holmes and Dan Martell actively involved in angel investing.

One of the biggest challenge facing Canadian entrepreneurs is bridging the gap between good ideas and a potential businesses. Many entrepreneurs are simply unable to attract the seed capital to take the next step.

2. Venture capital: If you’re an optimist, there are signs Canadian VCs are getting a bigger appetite for risk. There still isn’t enough money, particularly growth capital. There aren’t enough VCs or institutional investors. And Canadian VCs are still too cautious. But the VC sector did take a modest step forward last year.

OMERSIn particular, OMERS Ventures finally offered a domestic source for series B capital. This was highlighted by its investments in HootSuite and Shopify, which raised $160-million and $100-million respectively. It’s important to remember these are mega-deals in relative terms, and show there is capital for Canadian startups looking to develop into world-class companies.

In the seed/series A world, it was encouraging to see healthy investment activity by players such as iNovia Capital, Version One Ventures, Rho Canada, MarS IAF, BDC Venture Capital and Real Ventures. Keep an eye on LX Ventures, the publicly-traded accelerator headed by Mike Edwards.

Another positive sign was VCs attracting capital. The list includes McRock Capital ($50-million), Build Ventures ($50-million) and Real Ventures. It would help if the federal government started to flow some of the $400-million of capital it has committed.

Finally, there is more interest from U.S. VCs such as Insight Venture Partners, Spark Capital, Foundation Capital and ff Venture Capital.

According to the CVCA, foreign VCs invested $564 million over the first nine months of 2013, accounting for 40% of total investment. This was an 86% year-over-year climb, although it was skewed by a few large deals.

Either way, it shows if Canadian VCs are unwilling to provide growth capital, there are foreign VCs willing to step into the void.

3. Incubators and accelerators: After seeing a flurry of incubators and accelerators emerge, there are two key themes: consolidation and re-positioning. This is happening because, in part, there have been few success stories from accelerators and incubators.

While early-stage startups will have places to develop, incubators and accelerators are looking for companies with revenue traction or able to attract corporate interest. Call it impatience or a business model shift, but you can expect less interest in early-stage startups that are just interesting or more features than potential businesses.ryerson dmz

An example of an accelerator doing many things right is Ryerson’s DMZ, which is growing by leaps and bounds. At the same time, Ryerson Ventures is playing a key role in getting capital to startups within the DMZ ecosystem. Another interesting player is MaRS’ ICE practice, which is now focused on nurturing high-growth startups.

Conclusion: As someone involved in the startup ecosystem, there are lots of positive signs. Over the past three to five years, the sector has continued to mature and show progress.

For another perspective on the Canadian startup ecosystem, check out William Mougayar’s analysis. As well, CanTech Letter looked at five Canadian tech companies that it wished would IPO.