There was also a concern that some groups may not have the resources to continue which, in turn, would significantly weaken the entrepreneurial ecosystem. “With Covid-19, there is a very real fear that groups will not be able to increase membership dues and sponsorship funds enough to create a viable and sustainable business plan. The benefit of angel groups is that we support the needs of the angels to facilitate investment. Without the groups, angels will be individuals. This will make it harder for entrepreneurs to find the funds. And there will be fewer resources for angels to screen companies, and review business plans, do due diligence, and compare experiences.“
The likely decline in angel investing which is suggested by these comments threatens to undermine Canada’s entrepreneurial base.
“COVID-19 is a momentum and capacity building killer. It’s especially disheartening to the Canadian startup community which has been scaling-up and capturing global attention, attracting capital and talent, investing in new resources and infrastructure, and building national confidence and pride. For some startups, the pandemic may expedite the growth of their business but for most it will be a disaster. As it stands, in a few short months we are at risk of losing an entire generation of early-stage companies who are too small to attract institutional venture capital, and whose survival cannot depend on the pocketbooks of friends, families and angel investors.” These concerns are shared across Canada’s entrepreneurial ecosystem. For example, speaking in mid-April, MaRS CEO Yung Wu suggested there are “days, not weeks and months” to preserve the innovation sector.” 12
12 Mars’ Yung Wu: “We have days, not weeks and months” to preserve innovation sector”, Betakit, 17th April 2020. https://betakit. com/mars-yung-wu-we-have-days-not-weeks-and-months-to-preserve-innovation-sector/
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ANNUAL REPORT ON ANGEL INVESTING IN CANADA
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