The National Angel Capital Organization (NACO)

The National Angel Capital Organization (NACO)

June 29, 2015 10:00 ET

Angel Investing Networks Injected $90.5M Into Canadian Startups in 2014

TORONTO, ONTARIO--(Marketwired - June 29, 2015) - The National Angel Capital Organization released its annual Angel activity report. The report, which is based on a survey of 30 Angel groups across Canada, reveals that these groups made 237 investments in 181 companies, amounting to $90.5 million, with an additional $110.4 million of funding leveraged into the investments.

"We're deeply encouraged by the results of this year's report, which shows that the increasing connectivity of our member Angels is helping to provide Canadian companies with the capital they need to continue growing locally." Yuri Navarro, NACO Executive Director.

New this year, Industry Canada has contributed a section to the Report. Industry Canada compiled and analyzed a dataset of 110 Angel-backed firms that received funding from NACO members between 2010 and 2012, to further analyze the impact of Angel investment on job creation and investment in innovation for early-stage companies. The data was captured in NACO's 2014 Report on Angel Investing Activity in Canada: Harnessing the Power of Angel Investors (Angel activity report), which was released today on its website.

"Our government is a proud partner and contributor to NACO's report on the state of Angel capital investments in Canada. Through the Venture Capital Action Plan, we are committed to supporting entrepreneurs who invest and innovate, resulting in the creation of jobs and economic growth across Canada." – Industry Minister James Moore.

"In addition to the large amount of Angel funding being put into innovative companies, we are seeing a direct connection between Angel investing and a stronger small business economy. We see an increasing amount of high-paying jobs created, enabling a stronger, more vibrant and diversified economy in Canada." Michelle Scarborough, NACO Chair.

NACO 2014 Report

Across Canada, 30 Angel groups participated in the 2014 survey, representing over 1,700 investors coast to coast. Angels tend to invest in close geographic proximity, with a majority (63%) of Angels located in Central Canada, 30% in Western Canada, and 7% in Eastern Canada. Angels are essential to the Canadian economy, driving innovation and fueling job creation.

This year's report also included a review of data which shows that 88 Angel backed companies created 764 new high paying jobs between 2010 and 2012, and invested more per employee in R&D than non-Angel backed companies.

Over 80% of Angel funded startups fall primarily within 2 sectors: ICT (information-communication technology) and Life Sciences (health related companies) distantly followed by clean technology. Investments in Life Science firms tend to be double the investment in ICT or Clean Technology. Furthermore, the Angel activity report indicates that 75% of the deals are syndicated, involving capital outside the Angel Group.

Looking ahead at the future of Angel investing in Canada, Angel groups have identified a need to collaborate by sharing resources, tools, and best practices across groups as the key to supporting growth, better deal flow and outcomes.

NACO Report History

The Angel activity report conducted by NACO examines Canada's Angel investor community, and identifies key industry trends and best practices for investors and entrepreneurs.

Since 2010, the report has captured 712 investments, in 409 companies. This represents a remarkable $270 million injected into the Canadian entrepreneurial ecosystem, with over $180 million invested over the last two years.

The 2014 Report on Angel Investing Activity in Canada: Harnessing the Power of Angel Investors, the fifth of its kind, is released in partnership with the Government of Canada, KPMG Enterprise and BDC Capital.

Read the Full Report

Partner Quotes

"BDC Capital plays an active role in Canada's early-stage ecosystem and we are proud to partner with NACO on the 2014 Report on Angel Investing Activity in Canada," said Dominique Bélanger, Vice President, Strategic Investments and Partnerships at BDC Capital. "The findings point to an increase in both collaboration and co-investing, which will enable Angel-backed firms to create jobs and wealth here in Canada and to be more competitive globally."

"NACO's Angel Activity Report shows how active and engaged Canada's Angel Investing network has become. KPMG Enterprise is dedicated to helping small and medium sized Canadian companies flourish. NACO's active Angels are achieving this by allowing new startups the time to grow and prosper, and we are proud to support this important work," says Dennis Fortnum, Canadian Managing Partner, KPMG Enterprise.

About the National Angel Capital Organization

The National Angel Capital Organization accelerates a thriving, early-stage investing ecosystem in Canada by connecting individuals, groups, and other partners that support Angel-stage investing. NACO provides intelligence, tools and resources for its members; facilitates key connections across networks, borders and industries; and helps to inform policy affecting the Angel asset-class. For more information please visit www.nacocanada.com or follow us on Twitter @AngelCapCanada.

About BDC Capital

A subsidiary of the Business Development Bank of Canada (BDC), BDC Capital offers a full spectrum of specialized financing and investment solutions to help Canadian entrepreneurs achieve their full growth potential. With more than $1 billion under management, BDC Capital takes a strategic, patient approach to nurture companies' development over the long term.

From venture capital to equity to growth and transition capital, our team of over 100 experienced, local professionals partner with entrepreneurs to identify and meet their needs on flexible terms. Some of the sectors in which we specialize include IT, industrial/clean/energy technology, and healthcare. For more information, please visit www.bdccapital.ca or follow us on Twitter at @BDC_Capital.

About KPMG Enterprise

KPMG Enterprise was formed in 2004 to respond to a growing need for a professional service firm that focuses on private companies. We were the first to dedicate a team of advisers exclusively to entrepreneurs, family businesses, and emerging fast growing companies. Our global network of trusted advisers are well positioned to respond to the specific needs of private companies. We bring extensive resources and expertise in audit, tax, and advisory services, scaled to the needs of our clients. We provide financial, operational, and strategic advice during any stage of the business lifecycle. For more information, visit www.kpmg.com.

Backgrounder

Canadian Angel Investors

30 Angel groups across Canada, representing 1,700 active Angels made 237 investments amounting to $90.5 million.

A majority of Angels (63%) are located in Ontario, with 30% in Western and 7% in Eastern Canada.

The average deal size was $1.2 million, an increase over 2013 and 2012 figures.

80% of funding falls within 2 sectors: ICT (information-communication technology) and Life Sciences (health related companies).

75% of the deals are syndicated, involving capital outside the Angel group and receive more investment.

10 positive exits (from 9 companies) of which eight were M&As and one was an IPO.

New investments increased by 66% in 2014

Central Canada continues to be the hotspot for Angel investment activity with 89% of investments made in the area.

Funding Success Funnel in 2014

2972 startups applied for Angel Funding

695 companies presented*

271 companies went through due diligence

237 companies were funded

*based on 24 of the 30 groups that reported the number of presentations held

Contact Information

  • For more detailed data and/or to arrange an interview with
    NACO Michelle Scarborough or
    NACO's Executive Director Yuri Navarro:
    Ioana Stoica, Marketing and Events Manager, NACO
    416 581-0009 Ext: 2
    media@nacocanada.com

    Melissa Durrell
    President, Durrell Communications
    519-500-4408
    melissa@durrellcomm.com