EXECUTIVE SUMMARY Investment Activity in 2021
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were in businesses with 1-5 employees (and 71% with 10 or fewer employees), with relatively few investments in businesses with more than 25 employees. Follow-on investments are typically in slightly larger firms – 42% in businesses with 6-10 employees compared with 11% in businesses with 1-5 employees. Just over one-quarter of follow-on investments were in businesses with more than 25 employees compared with 15% of new busi- nesses. Angel investment activity continues to be distributed unevenly across Canada. Central Canada (Ontario and Quebec) accounted for 67% of investments in 2021 compared with 27% in Western Canada, 5% in Atlan- tic Canada and 1% in Northern Canada. Compared with 2020, Central Canada’s dominance was reduced (77% in 2020), with the share of investment rising in both Western Canada and Atlantic Canada. Central Can- *See pp. 40, 159 for regional breakdown. **One prominent Western Canadian success story is Skip the Dishes, which was founded in Saskatchewan and then expanded to Manitoba. Its founders are now supporting the broader eco- system across the Prairies via Harvest Builders.
ada’s dominance is also reflected in its share of the amount invested, accounting for 72% of the total. But here again, this is lower than in 2020 (78%), with the West accounting for 16% of the amount invested and Atlantic Canada accounting for 12%. As a result of Cen- tral Canada’s declining share of investment activity, it has, for the first time, been overtaken by Western Can- ada* when investment activity is measured in terms of number of investments calculated on a per-capita basis and by Atlantic Canada when investment activi- ty measured in terms of the amount invested. Central Canada’s dominance is a function not just of its greater number of investments but also on account of its higher mean size of investment.** The mean size of investment in Central Canada in 2021 was $377,000, compared with $301,258 for Canada as a whole and $242,000 in the West. Atlantic Canada’s mean size of investment in 2021 was $317,000.
BY PROFESSOR COLIN MASON
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