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POLICY RECOMMENDATIONS
ial base which in turn is critical for the success of its overall innovation economy. The risk for Canada is that entrepreneurs will move to the USA to raise risk capital if they cannot access it in Canada. The consequence is that Canada will lose out on the technology, talent, IP, jobs and financial returns that will be generated by these companies. These factors build a strong case for government support of the structured angel ecosystem.
charged would potentially be invested, while success fees charged to businesses that raise capital through the angel organization comes out of the investment to- tal. There is a strong case for supporting the operation- al costs of angel organizations. As already emphasized, the contribution of angels goes beyond the capital that they invest. Angels contribute their expertise, provide support to entrepreneurs and put governance structures in place, all of which require a significant time com- mitment for which they do not bill their investee com- panies. In addition, the investments that angels make contribute to the development of talent that gets recy- cled in the ecosystem. Finally, the education, learning and investment tools that both angel organizations and individual angels provide help to create an investment culture. This support is especially important for organi- zations based outside of urban centres on account of their smaller population of investors, fewer corporate sponsorship possibilities and fewer alternative funding
Government support could strengthen Canada’s ear- ly-stage ecosystem by focusing on:
Operational support. First, angel organizations that are professionally managed are generally more effec- tive than those that rely on the efforts of their volunteer members. Although, as we have seen, there is potential to raise income from membership fees from individu- al and corporate members, and from sponsorship, the scope is limited. Moreover, the fees that members are
2022 ANNUAL REPORT ON ANGEL INVESTING IN CANADA
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