ANGEL ORGANIZATION CHARACTERISTICS Organizational Structure
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Occasionally, angel organizations focus on particular industries or sectors, or on a specific type of en- trepreneur, such as women found- ers. Some organizations serve spe- cific types of investors; such as women investors, alumni of a spe- cific post-secondary institution or investors from a specific field. Their goal is to convene a group of simi- larly-minded individuals who bring a diverse set of skills, expertise, and experiences into the organization, benefiting its members. Managed angel organizations offer a variety of advantages for angels compared with investing independently: gain- ing access to deal flow; increasing the ability for investment diversi- fication; pooling expertise to con-
duct better due diligence; an ability to make more sizable and meaning- ful investments; and greater control over the businesses they invest in. Many organizations also provide their members with education and networking opportunities. In ad- dition, there are various types of for-profit angel organizations. Most common are professionally man- aged pooled investment vehicles that raise capital from private indi- viduals. Some member-based angel organizations operate under a hy- brid model, running a side-car fund to co-invest in deals its members make.
In Canada, a majority of the orga- nizations operating in 2021 (54%) were structured as not-for-profit en- tities. A further 42% were for-profit entities (Figure 2). Significantly, the proportion of for-profit organiza- tions has increased over time (27% in 2018, 23% in 2019, 31% in 2020), pointing to an important shift in the organizational structure of angel in- vesting in Canada.
2022 ANNUAL REPORT ON ANGEL INVESTING IN CANADA
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