medium-sized enterprises (SMEs) with a 12-week wage subsidy. However, the call for applications for IRAP funding closed within a few days of the announcement.
Summary
This paper highlights the critical importance of angel investors in Canada’s entrepreneurial ecosystem. Angels provide crucial fnancing and expertise at the start of the entrepreneurial pipeline. Although the angel investor community may continue to make new investments, our expectation is that aggregate investment activity will decline with capital reserved for follow-on investments. The paper has identifed four ways in which governments can intervene to support angel investment activity: co-investment initiatives, tax incentives, convertible debt, and non-dilutive fnance (Such as grants). It has emphasized that design of interventions is critical to target the desired types of investors and businesses. Governments often lack a detailed understanding of entrepreneurial fnance. Government offcials are not exposed to the realities and practicalities of how startups operate, with the result that well-intended interventions have at times had design faws that undermine their effectiveness.
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