2023 Report on Angel Investing in Canada 121923W6

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2023 Investment Prospects Executive Summary

T he prospect for a recovery of angel investing during 2023 is not promising. The downward trend in ven- ture capital investment, which started in mid-2022 has continued into 2023 in response to ongoing inflation and high-interest rates and increased political and eco- nomic instability. The collapse of the Silicon Valley Bank (SVB) and its knock-on effects on the wider banking system has created an additional source of concern for investors. There has been a particularly steep decline in angel, pre-seed, and seed rounds. The exit window has also shrunk as big corporations have reduced their acquisition activity. Limited Partners are also cooling

on venture capital, especially micro-funds, in response to rising interest rates which is prompting institutional investors to preserve capital. Investors are more cau- tious, raising their benchmark for investing. And given that demand is increasing, the lower supply of capital is resulting in increasingly investor-friendly terms giv- ing investors leverage over terms and conditions. These market developments are reflected in the decline in the investment sentiment of Canadian angel organizations.

2023 ANNUAL REPORT ON ANGEL INVESTING IN CANADA

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