Angel Investors Ontario joins CSCA as it makes new pitch for government funding

Angel Investors Ontario (AIO) is joining a new investor advocacy organization as it looks to secure more government funding amid an uncertain future.

AIO, which represents 21 angel groups and 2,300 angel investors who have collectively deployed more than $800 million into startups to date, is a not-for-profit organization created in 2007 to support the growth of angel investing in Ontario.

On Thursday, AIO announced that it has joined the Canadian Startup Capital Association (CSCA), a new advocacy organization that launched last month with the goal of connecting Canada’s “fragmented” early-stage investment ecosystem and shaping public policy, and laid out a new mission.

“We have a fresh opportunity to have discussions with the province alongside the feds, and I believe that it’s healthy to have more people at the table.”

AIO’s previous mission was “to grow Ontario’s angel investing ecosystem to build prosperity, create jobs and strengthen communities.” Now, the organization says it is reorienting itself around the idea that “early-stage capital is infrastructure, and infrastructure has to be built and led.”

AIO hopes the CSCA will help it make the pitch to the provincial and federal governments that it can provide that infrastructure.

AIO relies heavily on provincial and federal governments to support its operations. However, since 2019 it has not received any money from the Ontario government aside from a small grant from the Ontario Securities Commission. As of last October, its latest federal financing (through FedDev Ontario) has also dried up. This has left the long-term future of the organization uncertain once again, putting it in a similar position as when executive chair Mark Lawrence first took over in February 2024.

In an exclusive interview with BetaKit, Lawrence argued that financing venture capital (VC) funds alone is not enough to seed Ontario’s next generation of technology startups. He described angels—who often play a key role in backing such companies at the earliest, riskiest stages—as “the underpinning of the VC funnel,” and asserted more needs to be done to support them in Ontario.

Lawrence said AIO joined the CSCA—instead of more established national investor advocacy organizations like the National Angel Capital Organization (NACO) or the Canadian Venture Capital & Private Equity Association (CVCA)—because it liked the idea of working with a new organization focused on the “need for local delivery capacity.”

“I’m not sure that existing models out there were going to be the best for the community going forward,” he said, arguing a “one-size-fits-all” approach across Canada would be a mistake.

“I believe that we have a fresh opportunity to have discussions with the province alongside the feds, and I believe that it’s healthy to have more people at the table,” Lawrence added.

The CSCA, NACO, and the CVCA have each put forth competing visions for how the feds ought to deploy that $750 million CAD it pledged towards “early growth-stage funding gaps.” The CVCA has argued it should be committed entirely to growth, while NACO has called for it to support pre-seed and seed investing exclusively.

The CSCA has proposed a bit of both. Lawrence said that AIO is broadly aligned with the CSCA’s proposal, but that he would like to see an even greater share allocated to angel and early-stage investing. Separately, AIO is currently seeking fresh funding from FedDev Ontario.

CSCA executive director Jesse Wiebe told BetaKit he is happy that AIO is joining, asserting that Canada needs to “better leverage the local infrastructure, organizations, and relationships that already exist,” such as AIO, to better activate capital across the country.

“More voices at the table is a good thing: it means advocacy cannot be controlled by a narrow set of interests, and it forces a more honest, transparent conversation about how capital is accessed and allocated,” Wiebe argued.

As to what that infrastructure should look like in Ontario, AIO has a series of recommendations for the province. They include introducing a 25 percent Ontario Innovation Investment Tax Credit to mirror similar incentives in other provinces; allocating new funding towards educational programming geared towards angel investors and entrepreneurs—which he says AIO and its network are best suited to deliver; and establishing four new funds aligned with provincial priorities, including defence, life sciences, cleantech, and food and AgTech, to co-invest alongside angel groups.

“I really hope that the province comes to the table,” Lawrence said.

Feature image courtesy Angel Investors Ontario.