132
Investment Characteristics: Firm Size 3.7
A ngel organizations predominantly invest in small businesses with growth potential, mostly those with 1-4 or 5-9 employees at the time of the investment, accounting for 49% and 22% respectively of investments in 2022 (Figure 18). This concentration of investments in small companies is consistent over time. However, some angel investments are in larger companies (with over 25 employees) (13%). This highlights the role that angels play in investing early in the financing life cycle of entre- preneurial businesses, providing not only the first round of external finance, but also follow-on investments in
businesses that are in the early stages of scaling up.
Investments in larger businesses are more likely to be follow-on investments. However, this distinction was not as great in 2022 as in previous years, although the comparison is somewhat problematic because of the small number of follow-on deals for which we have in- formation on the size of the firm (14, cf. 65) for new in- vestments. As Figure 19A shows, over half (54%) of all new investments were in businesses with 1-4 employ- ees and 71% had between 1 and 9 employees, with rela-
2023 ANNUAL REPORT ON ANGEL INVESTING IN CANADA
Powered by FlippingBook