US-based startup investment platform AngelList will bring its Angel Funds service to Canada this week, BetaKit has learned. The launch comes less than two weeks after an updated decision from the CSA Regulatory Sandbox initiative gave the company a green light in Canada.
Launched first in Ontario in October 2016, with a full rollout across Canada coming March 2017, AngelList allows startups to raise funds from accredited angel investors via AngelList Syndicates, a single-deal fund created to invest in a startup with capital pooled from multiple investors.
“The leads just have to focus on deal flow, judgment, and adding value, and we do everything else.”
Unlike the single-deal Syndicates Angel Funds, Angel Funds allow investors to raise and operate a VC fund on the platform. Investors leading an Angel Fund have sole control over investments and can cut cheques at their discretion; AngelList handles all administration, reviewing financing documents prior to signing and transferring funds same or next day once the deal is done.
“The leads just have to focus on deal flow, judgment, and adding value, and we do everything else,” Alex Norman, AngelList’s Canada Partner, told BetaKit.
To date, AngelList says it has launched close to 100 Angel Funds in the United States, deploying over $100 million CAD in capital. As part of this announcement, Canadian investors will now be able to participate in US-based Angel Funds as well.
Since launch in October 2016, AngelList Syndicates have made 55 investments for over $17.5 million CAD into Canadian startups.
AngelList must vet and approve all Angel Funds, so interested investors should pay close attention to the platform’s investment requirements and carry economics. Norman told BetaKit that AngelList is only looking for investors with “proven track records, a validated investment thesis, and the ability to add value to portfolio companies.”
“The investment backing we require for Angel Fund leads to start on the platform is another way to ensure they have the track record and trust to source good deals,” he said.
Norman also shared metrics with BetaKit on the impact of AngelList Syndicates since its launch in Canada, stating that 55 investments have been made using the service. Over 90 percent of the $17.5 million CAD in capital committed has come from outside of Canada. Notable Canadian rounds that received investment via an AngelList Syndicate include Drop’s $28.5 million CAD Series A, Unsplash’s $6.25 million Series A, and ChefHero’s $12.6 million Series A.
“It’s almost all net-new money from these AngelList Syndicates into the ecosystem, and it gets me pretty excited because it validates our ecosystem is on the map globally and that people want to invest in it,” Norman said. “AngelList is helping Canadian companies raise more money than they would have before, which will give those companies the runway they need to succeed.”