Introduction 5.1
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T his is the 11th Annual Report on Angel Investment Activity in Canada. It covers investment activity in 2020, the year in which Canada, along with the rest of the global economy, suffered a severe economic down- turn as governments at all levels took actions to lock down the economy in an attempt to restrict and ulti- mately eliminate the spread of the COVID-19 corona- virus. The Canadian economy experienced a sharp re- cession from mid-March, a partial recovery during the summer but a further, although less severe downturn in the final months of the year following the second wave of infections. Trends in angel investing followed these trends in the economy. There was a modest decline in investment ac- tivity from Q1 to Q2, with deals continuing to be closed
in Q2, in at least some cases where the investment pro- cess had started pre-pandemic. Deal activity dropped sharply in Q3 but bounced back in Q4. The concerns that were voiced in the early stage of the pandemic – and reported in last year’s Report on Investment Activ- ity – that angels would scale back their investing and that some organizations would not have the resources to continue, reducing the supply of startup and ear- ly scale-up funding which, in turn, would have adverse consequences for the entrepreneurial pipeline – did not emerge when considering the activity over a 12 month period however the sharp drop in Q3 is concerning. Most angel organizations shifted to online investing, and most of their members continued to invest through the year. However, a significant minority of angel orga- nizations did not make any investments.
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