Angel investors are the unsung heroes of the Canadian economy!

Angels invest personal, after-tax assets in exchange for equity in a start-up company (pre-revenue or in the early stages of revenue generation).

Because most Angels are serial entrepreneurs with proven successes of their own:

• They provide crucial growth capital for expansion or marketing by innovative job-creating companies;
• They provide invaluable management support, industry-specific advice and contacts;
• They provide vital experience in the building of high-growth companies.

Business Angel investors are the oldest, largest and most often used source of outside funds by growing companies.  Angels are the least understood players in our entrepreneurial landscape today, due to their desire for anonymity or not self-identifying as an Angel.

While only 17% of all small-to-medium-size enterprises (SMEs) are high-growth (2001), these few high-growth-rate firms create most new jobs.  Firms with fewer than 100 employees were responsible for the bulk of job creation over a 15 year period, according to a 2005 Industry Canada study.

Angels are the primary source of capital for these high-growth-rate SMEs to fund marketing and expansion activities.  With the recent sharp declines in traditional venture capital financing at the early stage, Angel capital is more important than ever for job creation in Canada.

If these growth-oriented SMEs win, all Canadians win.  We keep skilled workers and patents here, and help them to create wealth here, if they can get access to investment capital. 

But there is an estimated $5 billion gap in the availability of investment capital to early-stage firms in Canada.  Angels, who deploy independent venture capital out of their own personal net worth, are needed to fill this gap.  Yet, though the returns are commensurately great (27.7% internal rate of return), such investments are highly risky.