Angel investments, the “secret sauce” for Canadian startups, rose 41 percent among Network of Angel Investments- Ontario (NAO-Ontario) in 2012-13. That translated into investments for into 77 new Ontario-based early stage companies over the past year.
The NAO-Ontario is a provincially funded mandate by the government of Ontario, led by principals of the National Angel Capital Organization (NACO). It was established in 2007 with $2.5 million dollars to bring Angel investors together with entrepreneurs and companies seeking investment for mutual benefit.
The new figures released also apparently point to two government initiatives that have been accelerating angel investments into technology startups: Ontario’s Angel Network Program (ANP) and Canada’s Investing in Business Innovation Outreach program (IBIO).
“Entrepreneurs still need the private sector for the capital and expertise needed to commercialize,” said Jeffrey Steiner of NAO-Ontario. “By supporting the network, the government provides entrepreneurs an opportunity to attract growth capital from private investors province-wide.”
Since 2007, members of the NAO-Ontario have invested and leveraged $255 million of private direct investment into 169 Ontario companies, creating and sustaining more than 2,200 jobs. This $255 million is composed of $91.6 million in direct member investment (including $61.5 million from ANP-supported group members), and $163.3M in co-investment and follow-on investment by other investors.
Furthermore, the NAO-Ontario wants people to know that angel groups bring together their members for educational seminars and networking events, and conduct community outreach, bridging the information gap between investors and entrepreneurs. The “growing ranks” of organized Angel investors in these groups have “significantly helped early-stage companies fill their initial round of financing.”
“Alternatively, supporting groups that allow the private sector to collectively select and invest in early-stage companies helps ensure that high-value opportunities move forward. Angel-backed companies illustrate small business job creation at its finest and catalyze significant economic development throughout Ontario,” said NAO-O board Chair Dr. Patricia Lorenz.
The NAO-Ontario’s parent organization, NACO, has made its rounds in the media over the past little while. Two weeks ago we reported that angel investments nearly doubled in Canada last year, according to figures released by NACO. Last year there were 139 investments reported, compared to just 71 in 2011 and 66 in 2010. This translated to $40.5 million invested, compared to $35.7 million in 2010. It marked a 96 percent increase in the number of investments, but just a 13 percent increase in the total value of investments from 2011 to 2012.
“Angel group/network investing is a relatively new phenomenon in Canada, one that is making a significant contribution to support the Canadian entrepreneurship ecosystem,” read the report.