I N V E S TME N T ACT I V I T Y I N 2 0 2 0 I nves tment s
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VCs) are involved in the same round as the angel organization. Anecdot- ally, one angel organization has re- ported greater competition for deals in the early-stage ecosystem with new seed-stage VC firms entering the market, however, more analysis is needed to determine the impact and scope of this activity. This re- port does not include all amounts invested by other investors in deals because only some organizations were able to provide this informa- tion. However, the evidence that is available suggests that syndication is significant and has increased in 2020.
their investments in 2020, similar to previous years. This proportion was also similar to recent years and low- er than in 2015 and 2016 (Figure 13), confirming that contrary to the ex- pectations in the middle of last year, angels have not refocused their in- vestments away from new deals in favour of follow-on investments. In many cases, angel organizations invest alongside other investors as part of a larger syndicate, so the overall round size is often much larger than angel organization in- vestments alone would indicate. Syndication is defined as deals where multiple investors (typically angels but also early-stage focused
One of the significant attributes of angel organizations is having the fi- nancial capacity to make follow-on investments. This is critical in en- abling their portfolio companies to scale-up. As Figure 13 shows, with the exception of 2019, follow-on investments account for just over one-third of investments by angel investors. Whereas it was antici- pated that angel investors would increase the proportion of follow-on investments either to prevent their portfolio companies from running out of cash, to extend their financial runway, or to enable them to take advantage of new opportunities, this has not occurred. Follow-on investments accounted for 34% of
202 1 ANNUAL REPORT ON ANGEL I NVEST I NG I N CANADA The Chang i ng Landscape
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