Angel investors address the gap between love money and venture capital or more sophisticated sources of downstream capital. Generally considered the weakest segment of the financing services spectrum, angel investors must address higher risk, uncertain liquidity, long investment horizons, management gaps and a wide range of other industry-specific issues. Historically, angel investing has been carried out primarily by individual private investors; disciplined investment managers rarely invest at the angel level.
Relatively little has been known about angel practices and how they might be improved. Indeed, relatively little has been known generally about the angel investing “sector.” It is unclear, for example, how many angels there actually are in Canada. Oddly, many angels do not even recognize themselves as angel investors; they might not even be familiar with the term. Yet, the reality is that angels invest more than five times in early stage businesses as the entire venture capital industry combined.
Since 2000, more than 300 angels have participated in loosely organized grass roots events that have grown in sophistication and ambition. At the second Angel Investor Summit in October 2002, it was decided to Continue reading