2022 Report on Angel Investing in Canada 110822

INTRODUCTION The Role of Angel Investors in the Entrepreneurial Ecosystem

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Grant funding can complement angel investments.

Solium in Calgary, Skip The Dishes in Saskatoon, Blackberry in Kitch- ener-Waterloo, Verafin in St John’s, and Wealthsimple in Toronto. In other cases, angel-backed startups are acquired by larger companies (typically for $20 million-$30 million or less) with a strategic interest in exploiting their innovative capabil- ities. This model was well-demon- strated in 2021, when British Co- lumbia-based Redlen Technologies, an angel-backed startup, was ac- quired by Canon Inc. for USD $335 million. This relay race model has

been supplanted to some extent by the emergence and expansion of structured angel organizations over the past two decades in which indi- vidual angels invest together in the same businesses. This has created larger pools of capital and created the capacity to make both larger initial investments and follow-on in- vestments ($500,000-$2 million). It is also common for angel organi- zations to participate in what have been termed ‘bundled investments’ 2 - syndicated investments along- side other investors, including oth-

er angel organizations, early-stage venture capital funds, public co-in- vestment funds, family offices and crowdfunding platforms. Govern- ment grant funding can function as an additional complement to Cana- dian angels’ investments, increasing the impact of the angel funding their investee companies receive.

2 Mason, C (2018) Financing entrepreneurial ventures, in R Blackburn, D de Clercq and J Heinonen (eds) The Sage Handbook of Small Business and Entrepreneurship (Sage: London), pp 321-349.

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