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The Financing Funnel 3.2
A ngel investors invest in only a small proportion of the companies that approach them for fund- ing. The angel investing process can be characterized using a financing funnel. A large number of companies approach angel organizations to seek funding. The ma- jority of these companies are turned down by the or- ganization’s management at the initial screening stage, being considered unsuitable for presentation to the an- gel organization’s members. Some will be deemed unin- vestable, others may be judged as having potential but not to be investment-ready and requiring further work
on their pitch deck or business plan, while others may not fit the organization’s investment focus. However, such outcomes are not necessarily negative as these entrepreneurs are likely to receive valuable feedback which may help them become investment-ready in the future, or be directed to more appropriate sources of funding. To quote one angel investor — “the first busi- ness plan that an entrepreneur writes is not the one that gets funding.”
Moreover, most of the entrepreneurs who are invited to
2023 ANNUAL REPORT ON ANGEL INVESTING IN CANADA
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