T HE P RIMER F OR A NGEL I NVESTMENT I N C ANADA
E DITOR ’ S N OTE I first heard of angel investors more than a decade ago when I wrote a column on small business issues for The Financial Post . At that time, information about early-stage investing was largely anecdotal and tended to focus on the practice almost as if it were the domain of the privileged few. There appeared to be no common bonds — either in existence or in development — between Canadian angels, venture capital firms, merchant banks or other private investors. This was a time when the Canadian mutual fund industry was in its infancy, and Canadians themselves were yet to wholeheartedly embrace investing as a means to wealth creation and preservation. Today, Canadians’ knowledge and understanding of investing is exponentially ahead of where it was in the early 1990s. It is also clear that angels and other investors have a great deal in common in terms of their objectives and appetites to equate risk with reward. But while Canadians have been quick to accept many different forms of investments and become a captive audience for an industry of financial experts, consultants and advisors, angel investors have not had a similar benefit of information sharing or counsel. Until recently, angels – who, by nature, take significant investment risk — have had to continue to rely on personal advisors and their own tried and true practices and principles for success. This book is an effort to bring together the best practices and principles that have helped Canadian angel investors succeed over the past years. Its genesis was the program and discussion at the 2002 Angel Investor Summit held in Toronto, but its content is the result of angels from across the country sharing their experiences for each others’ benefit. As such, this book is not exhaustive; it is a work in progress. As the National Angel Organization continues its work at raising awareness and discussion around issues related to angel investment in Canada, I hope that future volumes will improve and enhance the content of this effort. Much study has been recently devoted to the significant impact that early-stage investing, entrepreneurs and small and medium businesses have on the Canadian economy and the country’s prosperity. I hope this is a contribution to their continued success.
Chethan Lakshman RBC Financial Group Toronto Summer 2004
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