C HAPTER 9: B UILDING A N ATIONAL A NGEL O RGANIZATION
and organizational considerations. At the conclusion of the meeting, the group voted in favour of creating a Founding 100 Members group of the NAO in order to set the founding board, select an Executive Director, incorporate the organization and set the agenda for Angel Investor Summit 2003 to be held in Montreal on October 30, 2003. The Founders are set to reconvene in Montreal for the
AGM on the evening of October 29, 2003. NAO AND PROGRESS TO DATE
The NAO seeks to engender an environment of confidence and trust that will allow the angels to communicate openly with each other. By establishing and cultivating such an environment, many angels are willing to participate in broader research, particularly when they see the genuine interest of policymakers as well as educational benefits for themselves. NAO has already performed pioneering research work with the Rotman School of Management and is in discussions to conduct broader based work with leading researchers at Queen’s Centre for Economic Development (QCED), the Richard Ivey School of Business and the Haskayne School of Business. By acting as an independent hub that respects the angels’ right to privacy, the NAO should be able to provide aggregate information that has been unavailable to date. The federal government through Industry Canada, as well as the provinces of Ontario, Manitoba, Alberta and PEI, have also expressed interests in working with the NAO to produce more effective public policy that will encourage economic growth. In the summer of 2003, the NAO will begin a cross-country fact-finding tour to discover the gaps and impediments to early-stage financing in Canada. The findings from this Among its first priorities, the NAO is examining the nature of the venture capital gap and the determinants of success for angels seeking to fill it. NAO research indicates that the venture capital gap is actually finite and methods exist to quantify the gap. Furthermore, the actual funding gap for quality projects represents an amount that is less than 2 per cent of the cumulative net worth of the high net worth individuals in the country. Critics of the VC gap notion often suggest that there actually is no funding gap, rather, there is a quality gap. The suggestion is that if the emerging companies were of high enough quality there would be more than sufficient money waiting to invest. tour will be shared with angels, policymakers and other stakeholders. ANGEL INVESTMENT AND THE VENTURE CAPITAL GAP By any name, there is a gap that leaves junior companies seeking funds. There could also be cultural, structural and educational gaps that prevent much of the available wealth in the country from investing in early stage private equity. DETERMINANTS OF ANGEL INVESTING SUCCESS The Angel Investor Summit 2001 co-chaired with Roger Martin, Dean of the Rotman School of Management, University of Toronto, concluded that there were both macroeconomic and microeconomic determinants for angel investing success. At the microeconomic level, angels can improve their returns on investment through networking, diversification, investing in groups and adopting best practices. Further, it was determined that there are many cluster specific barriers, practices and determinants that must be considered by angels. The NAO can help to build awareness, education and facilitate activities and programs addressing these microeconomic issues.
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