New programs and expanded support for connectivity between urban and emerging ecosystems are driving growth for The National Angel Capital Organization (NACO) across Canada. This spring NACO is launching a Western Canada Regional Headquarters in Calgary, AB. As well, Canada’s industry association for angel investors is expanding its investor education programming in Atlantic Canada and collaborating on new programs with the 40+ regional angel groups and 45+ innovation hubs in the NACO network to support the emerging trend of syndicated angel investing.
New Programs Expand Canadian Angel Activity
NACO’s expansion into Calgary recognizes Alberta as an emerging source of early-stage capital for Canadian entrepreneurs. NACO’s data findings indicates that Western Canada has significant untapped pools of capital. In global rankings, Startup Genome’s 2019 Report listed Calgary and Edmonton as ecosystems that are in the early stages of emergence. Furthermore, Vancouver is listed as one of the top 30 startup ecosystems in the world, despite needing to close the gap in early-stage funding.
“Expanding angel activity will allow emerging ecosystems, including Western Canada, to successfully diversify their economies, promote inclusive economic prosperity, and benefit from growth in the innovation sector” said Claudio Rojas, CEO of NACO. “Enhancing national connectivity benefits entrepreneurs in all communities and regions across the country. Urban centres have an important role to play in flowing investment into non-urban communities.”
In Atlantic Canada, NACO has new programming that includes delivering NACO Academy throughout the region. A series of roundtables with key stakeholders are planned to help establish a regional angel network, which is vital to supporting entrepreneurs in Atlantic Canada.
Other regions that have successfully activated deep pools of angel capital include Northern Ontario, where the most successful angel investment group in North America resides. Northern Ontario Angels, the region’s leading group of investors, have invested over $132M into entrepreneurial Canadian companies. This is equivalent to unlocking $821 million in Alberta and $6.9 billion in angel capital across the country.
Connectivity Between Urban Centres and Emerging Ecosystems
Indigenous economic development is vital not only to rural and emerging centres across Canada for community sustainability, it is also important both from a moral perspective and for economic opportunity. Young dynamic entrepreneurs in indigenous communities have meaningful contributions to make to Canada’s growing innovation ecosystem. Increasing access to capital and connecting these entrepreneurs with investors will allow them to scale companies that make a positive impact on their communities. This will build a stronger, more inclusive and vibrant economic landscape.
Canada’s leading innovation hubs also play a critical role in bridging connections between angel investors and entrepreneurs. NACO has piloted a new Investment Readiness Program with Ryerson University. This education and mentoring platform will give entrepreneurs at Canada’s leading innovation hubs access to angel investors.
As a national platform, NACO is building programs to support its more than 40 angel groups ensuring that angel networks have the operational tools and educational resources they need to advance inclusive access to capital. More importantly, NACO works with its members to ensure that its regional programming is sensitive to the needs of entrepreneurs in their local communities.
New Trends Emerge with Nationally Focused Sector-Based Angel Groups
In Ontario, NACO is collaborating with regional angel groups to ensure the sustainability of angel activity in the wake of provincial cutbacks for early-stage innovation. This is important because angel groups attract and channel investment into ventures that will have a positive impact on Canadians from coast to coast to coast.
“We are pleased to support a newly formed angel group of Canadian physicians, HaloHealth. Recently accepted into NACO’s national network, the founding MDs behind this initiative are sharing their accumulated healthcare expertise to shape the future of our healthcare system,” said Rojas.
Physicians in Toronto-based HaloHealth invested in Vancouver-based CareTeam. Co-founded by CEO Dr. Alexandra Greenhill, HaloHealth physicians, alongside fellow NACO member Montreal-based BCF Ventures, provided funding to help CareTeam build an AI‑enabled digital health platform allowing patient‑centered care collaboration for individuals suffering from chronic illnesses.
Angel investors in urban centres and throughout Canada have a significant role to play in ensuring continuity in the funding continuum. Entrepreneurs in all parts of the country benefit from national connectivity between angel investors in other regions, as this attracts greater levels of investment into high potential entrepreneurs.
New Trend in Angel Syndication Fills Funding Gaps
A new trend is emerging around syndicated deals. National data indicates that these types of deals have more than doubled since 2015. In 2018, total investments from syndicate deals was $262.7 million. This trend is expected to continue and is directly related to the evolution and increased sophistication of the angel investment asset-class in Canada over the past 10 years.
Larger syndicated deals and follow-on investments between $500,000 to $3 million in funding serve as the necessary gateway to later-stage capital for scaling companies. This trend highlights the critical role that angel capital plays in filling funding gaps in the innovation ecosystem.
“A smooth funding continuum reduces frictions in the capital raising process, which allows entrepreneurs to better focus on building their businesses and avoid early exits. NACO remains focused on supporting early-stage capital for Canadian entrepreneurs. In activating more angel activity across both urban centres and emerging regional ecosystems, NACO’s programming has expanded to address the scale-up funding gap between angel and venture capital,” commented Rojas.
NACO’s expanded programming, which includes the newly launched Built By Angels events, is consistent with NACO’s mission to support the vibrancy of angel activity in Canada by ensuring that Canadian entrepreneurs have access to capital across the entire funding continuum.
Over nearly 20 years, the National Angel Capital Organization (“NACO”) has emerged as the bedrock of Canada’s entrepreneurial and innovation economy, as Canada’s national platform for regional collaboration and national connectivity. NACO represents a growing membership of over 4000 angel investors, incubators, and accelerators as they help Canadian entrepreneurs access capital and mentorship to grow their companies. Over the past nine years, NACO members have made investments in over 1400 companies totalling more than $850 million of direct investments, resulting in the creation of 7700 Canadian jobs. As a national platform, NACO enables national connectivity, regional collaboration, and faster access to Canada’s innovation ecosystem. NACOCanada.com