NACO partners with CABI to connect Canada’s early-stage funding ecosystem

naco summit

As the Canadian funding landscape has evolved, the National Angel Capital Organization and the Canadian Acceleration and Business Incubation (CABI) Association are working to evolve with it.

That’s why, during the NACO World Investment Summit, the two organizations confirmed a strategic partnership to better support the early-stage startup ecosystem.

NACO represents 3,300 angels and 45 angel groups across the country, and works to provide connections to the angel investing community and data on the ecosystem. CABI supports early-stage businesses by working with the private and public sector, and facilitating programs that help industry professionals establish industry incubation programs.

“Our goal as an organization is to professionalize angel investment and turn it into a sustainable asset class.”
– Yuri Navarro, CEO of NACO
 

“CABI is an organization that helps its members serve Canadian entrepreneurs. Angel investors are a critical part of the journey that entrepreneurs make once they move through any of the many incubators and accelerators operating across the country,” said CABI Chair Sunil Sharma. Sharma is also the managing director of Techstars Toronto. “By closely aligning CABI members with NACO’s network of angel groups and investors, we feel that outcomes for entrepreneurs will improve. Connections will be easier to make and the ecosystem will become more efficient.”

Responsibility for CABI’s Startup Visa Program — which allows entrepreneurs to become permanent residents if an angel fund or incubator commits to supporting them — will be transferred from CABI to NACO.

“This had been an important component of CABI’s work but it will now be well-served by NACO,” said Sharma.

NACO is also expanding its membership to include both incubators and accelerators from across Canada. NACO plans to introduce new services and benefits for accelerators and incubators along with improved services for current members in Q1 of 2018.

Speaking with BetaKit, NACO CEO Yuri Navarro pointed to Canada’s funding landscape changing over the past few years. NACO — which was founded in the 90s — had a mandate to connect angel investors to share best practices. As Canada’s tech ecosystem has grown, new models of funding early-stage startups have emerged, including family offices, angel groups, individual private investors, and private angel funds that all do their part to support the startup ecosystem.

But NACO couldn’t engage with all of these groups due to its mandate.

“There’s a bit of diversity already in our ecosystem, but there were limitations to that, where certain organizations that we wanted to work weren’t really able to do that because our rule strictly said that you had to be an angel. Our definition was an accredited investor who deploys their own capital,” said Navarro.

This meant, then, that startups didn’t have a smooth path to funding because of the lack of connectivity between angels, investors, incubators, and accelerators. The hope of working with CABI is that NACO can better help startups become more investment-ready.

“You don’t want them to spend six to 12 months a year raising,” said Navarro. “Our goal as an organization is to professionalize angel investment and turn it into a sustainable asset class, but that means companies need to succeed because stability comes from angels generating returns, and generating returns means the and companies have to succeed and get to an exit eventually.”

By combining the two organizations, NACO will be able to fulfill its usual goal of connecting the angel community, but also work more closely with incubators and accelerators across Canada since they are now considered members. There’s also an opportunity to collect more data, including tracking outcomes for companies and investors and completing more reports on the angel investing landscape.

“Those are things where NACO has been trying to do that for a long time at the angel side, but now we’re saying there’s actually a critical mass type efficiency and value we can add by bringing everyone to one tent and help whole community come together.

Jessica Galang

Jessica Galang

Jessica Galang is BetaKit's News Editor.