5.2 Early Evidence on the Impact of the COVID-19 Pandemic on Canadian Angel Groups CONCLUSION
It is vital that angel investors continue to invest. Entrepreneurs who start and scale-up innovative companies will be a vital component of Canada’s economic recovery. Entrepreneurs will develop solutions to the problems that COVID-19 has cre- ated for government, businesses and consumers, and enable them to adjust to the ‘new normal’. The Introductory chapter suggested a likely
scenario of a decline in angel investing, a focus on supporting their existing portfolios, a scaling back on new investments and a focus of any new investments on COVID-19 related opportunities. The responses from groups (made in March 2020) suggests that there is early evidence to confirm that these outcomes are occurring.
“Covid-19 is impacting investors’ interest in investing in new companies, unless they can clearly address specific concerns. Most investors seem to be focused on supporting their current portfolio companies. However, on a positive note, the general reduction in available capital will cause a reduction in valuation and offer investment opportunities at more appealing valuations.” “COVID concerns, with a serious drop in the market, many angels have lost liquidity. Many startups themselves are also at risk of running out of cash given their clientele. There are many more ripple effects that are yet to have been felt. Our deal flow has been good of late, as well as our group engagement, but both are up in the air with COVID. We have not had some liquidity within the group in some time, but we continue to attract new angels. Better support for due diligence would also be helpful.”
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ANNUAL REPORT ON ANGEL INVESTING IN CANADA
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