T H E I N V E S TME N T E N V I RONME N T COV ID-19 Cha l l enges
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Some organizations commented that this had been driven by an in- crease in the funding available – in British Columbia, this was identi- fied as coming from angel funds and US investors, while in Quebec, it was attributed not only to the in- crease in US investment but to ear- ly-stage businesses getting more capital from government and insti- tutional LPs and to an increased de- mand for new technology in a post- COVID world. As a result, angels have faced increased competition for investments, sometimes being crowded out of deals. Another orga- nization suggested that valuations have risen to unrealistic levels be-
cause the government has injected too much stimulus money into the economy to support businesses and that this was creating a ‘frothy’ market in which weak ideas were being funded. A further concern relates to the longstanding disparities in access to capital. The Women Entrepre- neurship Knowledge Hub’s (WEKH) State of Women’s Entrepreneur- ship in Canada 2020 report found that women are majority owners of 15.6% of Small Medium Enterprises (SMEs) with one or more employ- ees. 11 Comparatively, Crunchbase’s 2020 report found that 20% of glob-
al startups were woman-founded. 12 WEKH found that women are less likely to seek and receive financ- ing than men (32.6% vs. 38%) and firms owned by men are more likely to receive venture capital or angel funding and other forms of lever- age such as trade credit and capi- tal leasing. Crunchbase 2020 data shows that the proportion of dol- lars to women-only founding teams also declined, to 2.3%, compared to 2.8% in 2019. 13 Underrepresented organizations, including Black and Indigenous founders, also receive less capital.
11 The State of Women’s Entrepreneurship in Canada (2020) wekh.ca/research/the-state-of-womens-entrepreneurship-in-canada 12 Crunchbase EoY (2019): Funding to Female Founders about.crunchbase.com/wp-content/uploads/2020/03/Funding-To-Female-Founders_Report.pdf 13Global VC Funding To Female Founders Dropped Dramatically This Year (2020) news.crunchbase.com/news/global-vc-funding-to-female-founders
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