Canadians' trusting nature can be detrimental to the value of a company when little is done to protect its intellectual property. If being acquired, buyers view unprotected intellectual property as a potential risk, meaning millions of dollars can be left on the table.

"Canadian companies aren't as aggressive in terms of building up their intellectual property portfolios as competitors from other countries," said Alfred Page, a partner in the Toronto office of BLG. "When I tell my clients who own startups to [file a patent] they say 'Yeah, we'll get around to that, there is not much risk of anybody copying us'."

Much of the issue is due to the lack of funding available for startups, causing new companies to balk at the cost of protecting its intellectual property. According to the Canadian Venture Capital and Private Equity Association (CVCA), there were more Canadian startups competing for less money between April and June 2011. $328-million was invested in 134 companies, down 2% from the $335-million spent on 119 during the same period in 2010, according to the CVCA.

Providing more funding to Canadian startups would help narrow the gap between Canada and other countries, Alfred said. The alternative will mean continuing to see more "long-term employment agreements" and less genuine acquisition offers.