169
GOVERNMENT SUPPORT FOR ANGEL INVESTING
A consistent theme in previous reports has been to make the case for government support for angel investment on account of the key role that angels play in the entrepreneurial ecosystem by providing the risk capital required by ambitious, high-potential, innova- tive entrepreneurs to start their businesses and embark on their initial scaling, along with the skills, knowledge, mentoring, support and networks that startups require. The role of angel investors is, therefore, both distinc- tive from venture capital firms and complementary, with angels financing many of the businesses that go on to become scaleup businesses, often raising further in- vestment from venture capital funds, and which make a disproportionate economic contribution in terms of innovation, productivity and employment and become anchors in their local entrepreneurial ecosystems.
The first is to provide financial support to angel orga- nizations: professionally managed organizations that comprise individual investors who invest collectively in businesses that typically have been screened by the organization’s management. Angel organizations facili- tate larger investments than the vast majority of angels could make investing on their own, have the capacity to make follow-on investments and have the credibility and professionalism to co-invest with both institutional and public sector investors in larger syndicated deals. Angel organizations expand the pool of capital available for early-stage deals by attracting investors who may not have otherwise chosen, or been able, to participate in the market and enabling active angels to invest more. They also enhance the efficiency of the angel market and have positive spill-over effects on the ecosystem. A thriving angel investment community that is under- pinned by angel organizations is therefore critical to ensuring the vitality of Canada’s entrepreneurial base
Governments around the world support angel invest- ment in two main ways.
2023 ANNUAL REPORT ON ANGEL INVESTING IN CANADA
Powered by FlippingBook