For almost twenty years, NACO has pioneered ear- ly-stage investing in Canada. Our national network includes over 4,000 angel investors, more than 40 regional angel groups, and 45 innovation hubs. This past year marked a period of transition, op- portunity, and development for NACO and its com- munity of leaders in the movement of increasing access to capital for entrepreneurs. In mid-2019, our Board of Directors selected Clau- dio Rojas as CEO, to lead NACO and Canada’s community of angel investors through a period of significant change in an exceptionally challenging environment for organized angel activity. Under his leadership, NACO’s membership has emerged as a recognized and essential resource for support- ing entrepreneurial growth in Canada. Over the past year, NACO has hosted national and regional summits, virtual roundtables with over 50 recog- nized leaders and 2,500 participants from across Canada’s innovation economy, launched an initia- tive to enhance the funding continuum and pipe- line to venture capital, and fostered the emergence of a new trend of issues-based investing — with HaloHealth, a network of physician-angels invest- ing in the healthcare industry; and The51, an an- gel collective investing in women-led companies. These are inspiring developments, as they reflect the important role of angel investors in driving in- clusive economic prosperity and social impact. Access to Capital for All Entrepreneurs Despite many areas of progress, other significant areas of opportunity for growth and improvement remain. Most notably, investment activity is un- evenly distributed across regions, provinces, and demographics. As NACO endeavours to bring equity to Canada’s entrepreneurial ecosystem, we recognize that the not-for-profit network of angel groups that has led the mobilization of investment for Canadian entre- preneurs is under-resourced. To increase access to capital for entrepreneurs from underrepresented groups, in 2020, NACO announced a new National Initiative for Women Entrepreneurs, and new pro-
grams are underway to bring equitable access to capital for Black people, Indigenous peoples, peo- ple of colour, and other historically underrepresent- ed founders. With these new initiatives, NACO will bring additional support to develop and deliver pro- gramming to unlock capital that is diverse, inclu- sive, and accessible to entrepreneurs in all regions and from all backgrounds. This is only the beginning of our access to equitable opportunities initiatives. Regional Developments. Untapped Potential. In Western Canada, NACO’s expansion with the establishment of a Calgary office recognizes the importance of collaborating with established angel groups to develop regional ecosystems by mobiliz- ing new pools of capital. Alberta, in particular, has all the ingredients to emerge as Canada’s epicen- tre of risk capital and has a history of producing world-class companies in high-growth industries. The recent collapse of the natural resource sector combined with the effects of the COVID-19 pan- demic have created an urgent need to focus on this region’s innovation potential. In Atlantic Canada we see an ecosystem that will benefit from the trend identified in this report of increased interprovincial investment. This develop- ment holds the promise of increased flows of capi- tal between regions, and from urban to non-urban centres. Connectivity with out-of-province inves- tors enables entrepreneurs to access new markets, tap into a wider range of expertise, and reflects the healthy development of a nationally connected ecosystem. As evidenced by the success of Verafin in St. John’s, which completed a $515 million equity and debt recapitalization, local angel capital can be combined with extra-provincial investment to cre- ate jobs and prosperity for all communities. While Central Canada demonstrated robust in- vestments, we see a potentially challenging en- vironment ahead for structured angel activity in Southern Ontario due to a retrenchment in pro- vincial funding for not-for-profit angel initiatives. In the absence of new mechanisms of support, this may result in the reduced mobilization of angel
6
ANNUAL REPORT ON ANGEL INVESTING IN CANADA
Powered by FlippingBook