I N T ROD UCT I ON Ange l I nves t i ng du r i ng COV ID-19
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Losing a generation of early-stage companies.
The effects of the pandemic on Canada’s economy have varied both geographically and across sectors, with face-to-face service delivery companies, notably tourism, hospi- tality, and travel, being the hardest hit but creating opportunities for digital and other tech sectors. Small businesses, on account of their lim- ited financial reserves, have been especially hard hit, with the num- ber of active businesses 4.5% be- low pre-pandemic levels. The Fed-
eral Government responded with a sustained large-scale economic stimulus package and emergency business support measures (notably wage subsidies, interest-free loans and rent subsidies) to mitigate the impact of the pandemic. The early concerns about the im- pact of COVID-19 on angel invest- ing in Canada were captured in last year’s Report on Investment Activity (covering 2019) which was written in
April/May 2020. The concern was that the pandemic would result in a major decline in angel investing. The most pessimistic angel organi- zations were concerned that there was “a risk of losing a generation of early-stage companies”, echo- ing similar concerns voiced by oth- er notable innovation ecosystem leaders, including the Chief Exec- utives of the UK Business Angels Network and European Business Angel Network. 2
2 Quoted in Mason, C. (2021) Financing an entrepreneur-led economic recovery: the impact of the coronavirus on business angel investing. In P McCann and T Vorley (eds) Productivity and the Pandemic, Edward Elgar, pp 73-87.
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