I N T ROD UCT I ON I nves tment Ac t i v i t y o f Ange l Organ i za t i ons i n 2020 : An Ove r v i ew
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ber of deals increased. Additionally, StartupGenome reported that 52% of USA-based startups reported a 20%+ revenue decline and in Q1 41% had less than three months of cash. In Q2, early-stage capital be- came even harder to raise, with the number of deals down by 38% in Q2 2020 compared to Q2 2019 and the amount of investment down by 58%. Deal activity dropped sharply in Q3 in the United States too, with the ACA reporting a decrease in deal count and deal value for angel and seed investing. 7
Looking in more detail at investment activity by quarter during 2020 (Fig- ure 1), there was a modest decline in investment activity from Q1 to Q2 (-10% in deals and -12% in the amount invested). However, deals continued to be closed in Q2, in at least some cases where the invest- ment process had started pre-pan- demic. However, deal activity dropped sharply in Q3: Q3 had 20% fewer deals than in Q2, although the amount invested actually increased by 26%. Deal activity bounced back in Q4 as the economy partially re- covered and angels began to adjust
to online investing, with the num- ber of deals 67% higher than in Q3 and 15% higher than in Q1, with the amount invested up 32% in Q3 and also higher than in Q1. These trends are consistent with developments south of the border. In the United States, the Angel Capital Associa- tion (ACA) reported a 25% decrease in deals and a 36% decrease in the amount invested in comparison to data from Q1 in 2019. Crunchbase found that seed and angel invest- ing amounts in Canada and the United States declined 21% from Q4 2019 to Q1 2020 but the num-
7 ACA Pandemic Investor Impact Report (2020) https://www.angelcapitalassociation.org/pandemic-investor-impact-report/
202 1 ANNUAL REPORT ON ANGEL I NVEST I NG I N CANADA The Chang i ng Landscape
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