Entries from August 2009
A short time ago, we asked one question of Canadian Angel community: What are the most challenging issues you currently face as an Angel investor or Angel group manager? We provided eleven options which we asked them to rank. Ninety people in the community answered our survey.
What is the most challenging issue you have as an Angel right now?
On average, the most challenging issue responding Angels faced was Managing Portfolio Companies.
After that, the most challenging issue was Angel Group Sustainability.
In third place was Forced Exits By Others.
Coming in fourth was Getting Past Due Diligence & Closing the Deal.
We also provided space for comments, and all of it was very interesting. Owing to limited space we can only summarize: while many concentrated on the limited scope of exits within a reasonable time frame, some expressed concern about the challenge of finding people to lead investments within a group of Angels, and a couple spoke of the elimination of incentive for Angels by cram-downs in later rounds that reduced their returns.
This was a most educational exercise, with a strong participation rate, and we will be sure to do it again some day!
Important note: If you have any suggestions for how we could make future micro-surveys even more relevant and objective, please do not hesitate to get in touch with us at info@angelinvestor.ca!
Categories: By The Numbers · NACO News
Tagged: Angels, canada, early-stage, investing, Issues, Survey, USA
Once again, in late July, our colleagues at the First Angel Network hosted their annual Wild Hog Ride. This annual ride mixes a bit of business with the pleasure of the open road, bringing together members of the First Angel Network from across the Maritime provinces. The pictures below say it all – no better way to travel!
Arriving at Caribou PEI
Stirling PEI
Wild Hog July 17 Georgetown PEI
Categories: General NACO
Tagged: first angel network, Halifax, motorcycle, Nova Scotia, Prince Edward Island, touring, Wild Hog Ride
In order to better facilitate active investing in early-stage companies in the Great Lakes region (including Ontario and Michigan), angels in Southwestern Ontario have joined with their counterparts in Michigan to form a Capital Pool Corporation on the TSX-V. The goal of this CPC, named Nouveau Angel Capital Corp., is to raise $20 million to invest in early stage companies in southeast Michigan and southwestern Ontario.
The founders think this is the first public company in North American specifically established to facilitate angel investing.
Read more about this ground-breaking deal on Crain’s Detroit Business online!
Categories: General NACO
Tagged: Capital Pool Corporation, Great Lakes Angels, Nouveau Angel Capital Corp., TSX-V, University of Windsor
On Tuesday, August 11th, Brad Cherniak, co-founder and partner of Sapient Capital Partners in Toronto, put the current downturn in Canadian venture capital into perspective in a Financial Post article. Beginning with the statement that the “problem is not too little money but too much”, Mr. Cherniak decries the lack of basic economic analysis of the troubles of this industry in North America, describes as unsustainable the flood of cash into VC that has overdiluted the management talent pool and skewed valuations, and explains the current VC downturn as a reversion towards the mean.
He goes on to provide some advice for private companies seeking growth capital, including: recalibration of expectations, anticipation of the future, and seeking creative solutions.
A good read!
Categories: General NACO
Tagged: Brad Cherniak, downturn, Financial Post, Sapient Capital Partners, venture capital
The pictures are in! Our president, W. Daniel Mothersill, spoke in mid-June at Enterprise Toronto’s Innovation Forum, which took place at the North York Civic Centre. The topic of his presentation was, of course, Attracting Investment: Life’s a Pitch. This was very well received with many requests afterwards for the presentation, and NACO also hosted a booth to talk about what we do for Angels, including telling entrepreneurs who are ready for investment about Angel investing. All involved found it a rewarding experience and we could very well do it again next year!
Dan at the 2009 Innovation Forum of Enterprise Toronto
Dan at the 2009 Innovation Forum of Enterprise Toronto
Categories: NACO Events
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A few months ago, while speaking with Keith Rabois (PayPal, LinkedIn, Slide), I got his thoughts on why the best startups are created during an economic downturn. I found them extremely insightful and felt they needed to be shared. Here’s the three reasons he gave…
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Despite a brutal environment for venture capital, the Oregon Angel Fund has closed a $3 million fund, its largest ever. The three-year-old fund gets half its cash from individual angel investors. The other half comes from the Oregon Growth Account, which invests a fraction of state lottery proceeds in Oregon-committed venture funds.
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For our friends in Alberta starting or investing in new growth-oriented businesses, here is a one-day workshop by Donald Cooper (of Cooper Sports Equipment fame) slated for September 21st, 2009. It is advertised as, “full of tough questions, new insights and incredible breakthroughs led by management guru Donald Cooper, MBA to create greater focus and commitment across your organization. The process requires integrity, self-awareness, the courage to face reality, the optimism to see an extraordinary future … and the commitment to create that future.”
Here are the details:
When: Monday September 21st, 2009 from 7AM to 5 PM.
Where: The Holiday Inn, 9816 107 Street, Grande Prairie Alberta.
Cost: $50 if you register by Sept. 1st, 2009. After that date your cost will be $150.
To register or for more information, email Tatiana Catana at tatiana.catana@gov.ab.ca or call (780) 538-5230.
Categories: Angel Links
Tagged: Alberta, Donald Cooper, entrepreneurs, Grande Prairie, workshop
Applications are being accepted until August 21st for the Canada’s Top 10 Competition, an annual showcase of the best startups around.
Canada’s Top 10 identifies, coaches and promotes the country’s leading investment prospects to members of the financing community from around the world.
The competition is open to Canadian companies actively seeking financing and operating within the life sciences, cleantech or ICT sectors. Winners are chosen by an independent expert panel of Canadian and U.S. venture capitalists and angel investors and receive:
- greater exposure to international investors and industry insiders that are important to their continued growth and success;
- access to industry experts at an annual coaching session; and
- access to active investors through a series of investment forums in Boston, New York, San Francisco and Washington D.C.
If you are with a company in these sectors and seeking capital, apply today!
Categories: Angel Links
Tagged: Canada's Top 10, Investment Showcase, OCRI, Ottawa
As detailed in The Globe and Mail and other sources recently, well.ca, one of the startup companies that presented at our First Canadian Co-Investment Summit (and won both a Top Ten and a Top Five award there), has just successfully closed a $1.1 million private financing round from a group led by Jordan Banks, former head of EBay Canada and managing partner of Thunder Road Capital.
The capital will be dedicated to scaling well.ca’s warehousing and distribution capabilities, expanding its product offering and adding features to its website.
In their media release, they state, “The Company was approached by several U.S. venture capitalists eager to participate in the round, but in the end decided to tap into its Canadian roots and raise the money at home. Well.ca considered several prominent Canadian venture capital options before ultimately opting to work with a handful of well-known angel investors, including several of Canada’s top technology entrepreneurs, as well as experts from the retail and drugstore verticals.”
Cool!
Categories: By The Numbers
Tagged: First Canadian Co-Investment Summit, successfully raised capital, The Globe and Mail, Thunder Road Capital, well.ca
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Investing in the success of small businesses is no longer an activity dominated by faceless corporations and venture capital firms. In recent years things have changed drastically in favour of the business angel or small business investor, which means that anyone with a little spare cash, belief in their business acumen and an adventurous spirit can get involved in this exciting and sometimes very rewarding venture.
But why has it become so popular, and why would anyone want to be a business angel?
Categories: 1
Dow Jones just recently published statistics for venture capital investment in the second quarter of 2009 outside of the USA. In short, $1.46 billion was invested in 250 deals in Europe, Israel and Canada. This is down 63% from the second quarter of 2008 and down from $1.99 billion in the preceding quarter (Q10-2009). Deal size is also down to an average of approximately $3 million.
Canada by itself had only 12 deals totalling $65 million – which is less than half of the $142 million invested in deals during the first quarter of 2009. The median deal size was $3.2 million.
Fast Facts
+ Non-U.S. venture investing in Q2 is at its lowest point since 2003
+ VCs backed just 250 deals in Europe, China, Canada, Israel & India
+ The U.S. saw $5.27B invested in 595 deals, up 32% from Q1 but down from a year ago
+ Europe saw its worst quarter on record as investment fell 47% to $831 million
+ U.K. was the #2 destination for venture capital behind the U.S.
+ Deal sizes shrank in every region worldwide
For the full reports, click here.
Categories: By The Numbers
Tagged: canada, China, Dow Jones, Europe, India, Israel, venture capital
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Innovation and initiative can serve Halifax well – Permjot Valia | GUEST COLUMN
THERE IS NO escaping the daily barrage of news telling us how bad the economy is or how things are going to get worse.
What is unusual about this downturn is how larger companies have been affected disproportionately compared to small- and medium-sized companies. This is perhaps one of the reasons why the gloomy news has been reported more widely than perhaps is justified.
The entrepreneurial spirit remains undiminished. In Halifax you will see evidence of this great characteristic if you go looking for it, rather than evidence of bad news.
Halifax has many advan-tages. Among them is a fantastic supply of well educated people. This makes it easier for companies to be innovative. It also means the local population is far more receptive to innovation.
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When an entrepreneur stands up to present a deal, angels in the audience look for market opportunity, scalability, intellectual property, quality of the management team, an exit plan, and previous entrepreneurial success—all the factors that make a company investment worth it or not. But, as most any angel who has ever screened a deal intuitively knows, an entrepreneur’s passion also plays a role in whether or not the deal moves forward or dies.
To understand this influence, Richard Sudek, current president of the Orange County Tech Coast Angels network and chairman-elect of Tech Coast Angels (TCA), is co-authoring a study with Melissa Cardon and Cheryl Mitteness on the effect of perceived entrepreneur passion on angel investing.
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With more than one hundred members, the Mid-Atlantic Angel Group Fund (www.magfund.com) is one of the largest organized groups of angel investors on the east coast. The group has invested in a motorcycle business that failed and in a drug company that was recently acquired by Novartis for up to $400 million.
All MAG members are required to invest in the group’s fund, which provides a 10 percent carry pool to angels who perform deal review and other work. But perhaps the most memorable thing about MAG is that in the midst of the worst economic environment since the Great Depression, the group, founded in 2004 in Philadelphia, has the reputation and credibility to raise a second $4 million plus fund.
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The Angel Capital Association’s (ACA) annual Summit was held April 15 to 17 in Atlanta, GA. This event is the largest gathering of angel investors in North America. Attendees came from the United States, Canada, Chile, United Kingdom, and other countries.
“With more than 300 attendees, we had a very good turnout,” says Knox Massey, Summit chair, managing director of Atlanta Technology Angels, and ACA board member. “Even with the overall economy in the dumps for the past six to twelve months, we continue to see a lot of enthusiasm, interest, and growth in the angel investing asset class.”
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Universities and Angel Groups Explore Working Together to Further Entrepreneurship
In March, representatives from angel groups and private and public universities from across the US participated in a mini-conference organized and hosted by the Office of Technology Transfer and the McGuire Entrepreneurship Program of the University of Arizona. The goal of the forum was to review best practices and explore models for interactions between universities and organized angel groups.
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The benefits of deal syndication are well appreciated by angel groups. “Syndication reduces financial risk and leverages angels’ expertise,” says David Verrill of Hub Angels in Boston, MA. “There are twenty plus angel groups in New England, and we syndicate quite regularly with two or three of them. More than half of Hub Angels’ deals are syndicated.”
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Exec Digital speaks to some of the most successful angel investors about their lucrative investments and plans for the future.
Angel investors provide backing for very early-stage businesses or business concepts. However, the money is merely an ingredient of the entire investment package; the crucial element comes in providing the relevant knowledge and skill-set.
Aside from the obvious, a business can benefit from the breadth of experience and knowledge in management and business that the angel brings. They've learnt a lot of lessions along the way and they bring that fact with them. As a result, they can be critical in terms of expertise and industry contacts…
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