187
CONCLUSION
T he strong growth in angel investing in 2021 as the economy recovered from the effects of the Covid pandemic continued during the first half of 2022. How- ever, angel investing went into decline in the second half of the year as inflation took hold, interest rates rose, and global political and economic instability increased. Taking the year as a whole, there was a significant de- cline in the amount that angel organizations invested, although a slight increase in the number of investments. The average size of investment also fell. There was an increase in the proportion of follow-on investments compared with 2021, but this reflects a correction from 2021 which had an unusually high proportion of new investments in response to the demand that was sup- pressed in 2020.
At the time of writing (early May), the prospect for re- covery of angel investing during 2023 is not promising. The Pitchbook-NVCA Q1 2023 Venture Monitor 8 indi- cates that the downward trend in venture capital in- vestment which started in mid-2022 has continued into 2023 in response to ongoing inflation and high-interest rates and political and economic conditions along with the concerns arising from the collapse of the Silicon Valley Bank (SVB) and its knock-on effects on the wid- er banking system. Although SVB did not have a Cana- dian banking licence, it pulled in debt lending capital from deposits made outside of the country, creating the concern that, by potentially eliminating one pool of capital that Canadian companies have relied upon, it will create a credit crunch. 9 The latest data from Briefed.in shows Canada experienced an 82% de-
8 https://pitchbook.com/news/reports/q1-2023-pitchbook-nvca-venture-monitor 9 How The Silicon Valley Bank Shutdown Might Impact Canadian Tech, Betakit 13th March 2023. https://betakit.com/how-silicon-valley-bank-shutdown-might-im- pact-canadian-tech
Powered by FlippingBook