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Report on Angel Investing Activity

Report on Angel Investing Activity

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  • 1.          
  • 2.   The 2012 Report on Angel Investing Activity in Canada   This report was made possible with the financial contribution from: With Support from: Industry Canada National Sciences and Engineering Research Council of Canada (NSERC) FedDev Ontario BDC Venture Capital Copyright © 2013 National Angel Capital Organization This report is produced by the National Angel Capital Organization. National Angel Capital Organization 101 College Street, MaRS Centre, Suite HL30B Toronto, Ontario M5G 1L7 Permission to Reproduce Except as otherwise specifically noted, the information in this publication may be reproduced, in part or in whole and by any means, without charge or further permission from the National Angel Capital Organization, provided that due diligence is exercised in ensuring the accuracy of the information reproduced; that the National Angel Capital Organization is identified as the source institution; and that the reproduction is not represented as an official version of the information reproduced, nor as having been made in affiliation with, or with the endorsement of, the National Angel Capital Organization. Page 2  
  • 3.   The 2012 Report on Angel Investing Activity in Canada   Acknowledgements   The heart of the report is the survey and interview results. This was conducted by Global Advantage Consulting Group led by David B. Watters and Sarah K. Chappell. Special thanks to all the Angel group managers who provided data and their time - without them there would be no Angel activity to report. This report was made possible with financial contributions from Industry Canada, NSERC and BDC Venture Capital. We wish to thank the following members of the Steering Committee for their expert advice and recommendations: Karen Wilson, OECD Steven Gedeon, Ryerson University Joe Irvine, University of Ottawa Thomas Hellmann, UBC - Sauder School of Business Jean-Marc Suret, University of Laval Mike Volker, Simon Fraser University Paul Schure, University of Victoria Marc Duhamel, Université de Moncton Jim Valerio, Industry Canada Michael Scholz, Industry Canada France Vaillancourt, NSERC Michael Cain, Angel Resource Institute David B. Watters, Global Advantage Consulting Group Sarah Chappell, Global Advantage Consulting Group Yuri Navarro, National Angel Capital Organization Melissa Dodaro, National Angel Capital Organization Special thanks to Doug Fyfe, Senior Project Manager at Manitoba Entrepreneurship, Training and Trade for providing information on Manitoba's Small Business Venture Capital Tax Credit Program, and to Clint Megaffin, Administrator of the Venture Capital Program in B.C. for providing summary statistics on B.C.'s Angel activity. Page 3  
  • 4.   The 2012 Report on Angel Investing Activity in Canada   Message from the Chair As the only national Angel organization in Canada, NACO strives to be the champion of Canada’s Angel asset-class, accelerating a thriving early-stage investing ecosystem that is critical to innovation and economic growth. In order to accomplish this, NACO works with individuals, groups and other partners to: • • • • Provide trusted intelligence on Angel investing in Canada, Connect investors, networks and industry partners, Support industry best practices and Angel investor professional development, and Inform policy in support of the early-stage funding ecosystem. This is the third study compiled by NACO that examines the activity levels of the visible Angel community across Canada. Each year, our report becomes more detailed, and we are proud to be able to provide primary data about Angel investing in the country. For the first time, this year’s report includes information on valuations, includes data on accelerators, and we have started to identify the groups that are leading the pack in Canada. Our goal for this report is to continually improve the availability of data on Angel investing in Canada and through our findings, to provide valuable information to all of our stakeholders. We are pleased with the findings of this report and look forward to working with our supporters to further develop this asset and analyze trends over the coming years. This year’s report surveyed 20 of 24 (83%) Angel groups in Canada that are NACO members. The survey shows that there were 139 investments in 2012, a 96% increase from 2011, and that they totaled $40.5M, a 13% increase over 2011. The conclusions and analysis of this report will lead to the sharing of best practices among NACO members, increased returns for Angels, and increased benefits for Canada. Finally, I would like to acknowledge the efforts of all of those who contributed to this report, including the Global Advantage team, the Research Steering Committee and the Angel group managers, without whom this report would not be possible. Michelle Scarborough, Chair National Angel Capital Organization . Page 4  
  • 5.   The 2012 Report on Angel Investing Activity in Canada   Table of Contents EXECUTIVE SUMMARY 7 1 INTRODUCTION 10 2 CANADIAN ANGEL GROUP ACTIVITY 2012 11 Survey Methodology 11 2.1 Angel Group Characteristics 11 2.1.1 Age of Angel Groups 11 2.1.2 Entrepreneurial Background of Angels 12 2.1.3 Method of Operation 12 2.1.4 Total number and Size of Angel Groups 13 2.1.5 Activity Level in 2012 13 2.1.6 Demand for Funding and Investment Activity 14 2.1.7 Targeted Location of Investment 15 2.2 Investments in 2012 16 2.2.1 Number and Value of New and Follow-on Investments 16 2.2.2 Top 5 Angel Groups in Canada for 2012 19 2.2.3 Co-Investment Activity 19 2.2.4 Number and Value of Investments by Region 20 2.2.5 Equity Shares and Valuations of Investments 22 2.2.6 Comparison of Investment Activity by Sector 22 2.2.7 Types of Government Programs Involved in the Investment 24 2.2.8 Number of Full-Time Equivalent Employees at Investment 25 2.3 Exits in 2012 25 2.3.1 Length of Investment before Exit 25 Page 5  
  • 6.   The 2012 Report on Angel Investing Activity in Canada   2.3.2 Return on Investment (ROI) 26 2.3.3 Method of Exit 26 2.3.4 Number of Full-Time Equivalent Employees at Exit 27 3 BEST PRACTICES AND CHALLENGES 28 4 ACCELERATORS 29 4.1.1 Access to Capital 29 4.1.2 Supply and Demand 29 4.1.3 Company Investment Details 30 5 CONCLUSIONS 31 6 ANNEX I: The Survey Instrument 32 Page 6  
  • 7.   The 2012 Report on Angel Investing Activity in Canada   Executive Summary The 2012 Angel Activity Report identifies key trends in Angel investment across Canada. NACO gathered survey and interview responses from Angel group managers to determine Canadian business Angel investments and exits in 2012. These responses were then compared with similar studies conducted in 2010 and 2011 to establish trends and to create a longitudinal database of Angel investments in Canada with the status of each deal tracked. Progressively, these annual surveys will help to determine how effectively Canadian Angel groups are meeting the need for seed and early-stage risk capital in Canada. The anticipated impact of this study will be to highlight the activities of Canadian Angels as a key stakeholder in the entrepreneurial ecosystem. This year we have begun to examine the performance of another key This Report provides a window into the activity level of “visible” member of this ecosystem, namely accelerators (see chapter Angels - namely Angel groups in 4). Over the past three years, this report has captured 270 Canada Angel investments, totalling $91.16M, a significant contribution to the Canadian entrepreneurial ecosystem. This report focuses on the activities of the most "visible" portion of the Angel market, Angel groups. It does not examine investments by individual Angels whose preference is to remain anonymous and thus "invisible". This Report surveyed 20 of the 24 Angel groups in Canada who are members of NACO. Of these, 15 groups were interviewed to ensure that the data provided by the group managers in the online survey was well understood and complete. Key points from the 2012 survey are summarized below: 1. Angel Groups in Canada • • • • • • 75% of Angel groups have been established • 83% NACO members responded within the last five years (since 2007). • 75% Angel Groups < 5 years old The majority of groups operate on the basis of individual members making their own investment • 70% Angel Groups saw > 50 decisions, as was the case in both 2011 and business plans in 2012 2010. • The size of Angel groups is The number of Angel groups in Canada increasing continues to fluctuate with two groups disbanding in 2012. The size of Angel groups is increasing: o 45% of Angel groups have fewer than 50 members (compared to 70% in 2011). o 30% of Angel groups had between one and 10 members making investments in 2012 (compared to 60% in 2011). o 20% of Angel groups had between 51 and 100 active members (a 16% increase compared to 4% in 2011). 70% of Angel groups indicated that they received more than 50 business plans in 2012. Percentage of business plans selected for detailed review increased from 14.9% (2011) to 15.3% (2012). Page 7  
  • 8.   The 2012 Report on Angel Investing Activity in Canada   • • • Percentage of business plans funded (of vetted plans) increased from 43.9% (2011) to 47.4% (2012). Percentage of business plans funded of all received increased from 6.5% (2011) to 7.3% (2012). Angel groups tended to invest in local companies in 2012, a trend that is consistent with prior years. 2. Angel Group Investments in 2012 • • • • • • • • In 2012, there were 139 investments reported (102 new, 30 follow-on, and 7 unreported) totalling $40.5M ($28.9M new, $7.3M follow-on • 139 reported investments ($40.5M) and another $4.3M aggregated). in 2012 vs. 71 reported 1 1 In 2011 , there were 71 investments reported investments ($35.7M) in 2011 (52 new and 19 follow-on) totalling $35.7M • 96% increase in deals ($20.8M new and $14.9M follow-on). • 13% increase investment value This represents a 96% increase in the number of investments and a 13% increase in the total value of investments from 2011 to 2012. For the deals that were reported, the mean 2 company valuation was $2.063M and the median company valuation was $1.550M . The highest level of reported activity was done by Angel groups based in Central Canada, which were responsible for $33.4M or 82% of total investments. Information and Communications Technology ($17.9M), Life Sciences ($7.5M), and Clean Technology ($3.2M) continue to be the top three sectors by investment value in Canada. 55% of recorded investments involved a coinvestor (15% less than in 2011), with 72% of co-investors in the form a syndicated • 82% Angel investment in 2012 investment of Angel investors (either ($33.4M) was in Central Canada. independent Angels or those associated with • ICT ($17.9M; 54%), Life Sciences different Angel group). ($7.5M; 23%) and Clean The majority of the reported investments Technology ($3.2M; 10%) remained leveraged government support. The top three as the top three sectors for Angel government programs leveraged by Angels investment in 2012. were FedDev Ontario's Investing in Business Innovation (IBI) program (33%), the Northern Ontario Heritage Fund Corporation (21%), and The National Research Council’s Industrial Research Program (NRC- IRAP) (17%). A number of investments took advantage of more than one government program.                                                                                                                                         1  One Angel group that had over-reported its investment activity in previous years revised its methodology in 2012 to correct this problem. In this report, this correction was applied to the 2011 and 2010 data as well.   2 Note that these numbers are based on the 25% of investments that invested equity and reported valuations in 2012. Page 8  
  • 9.   The 2012 Report on Angel Investing Activity in Canada   • The majority of investments (54%) were made to small companies with less than 5 employees (FTEs). The amount invested into these small companies was $11.042M. 3. Angel Group Exits in 2012 • • • • • • 3 Eight exits were captured in 2012. The exits can be divided into four different types: o Two firms ceased operations (one generated a negative return, and in the other the investor was able to recover the equipment and sell it to another company); o Two firms were sold to / merged with another firm; o Two firms were sold to a new shareholder; and o Two firms were sold to other existing shareholders Original Angel investments in the four recorded exits was $1.87M. Most of the exits took three years or less from investment to exit. Of the four exits with complete data reported - two were successful, one generated a negative return, and one was neutral – A total of $2.35M was returned to investors. Of the six exits reporting employment data at exit, one had 5 FTE or less; three had between 6-10 FTE and two had between 11-25 Full Time Equivalent employees (FTEs). 4. Accelerators For the first time, this Report also surveyed business accelerators. Highlights of the aggregated findings from • Average capital investment by six accelerators include: accelerators was $50K per • The median of the average capital company investment by the five accelerators was • Firms in accelerators received a $50,000 per company. total of $13.65M in investment • The investee companies were predominantly in ICT (59%), with new • ICT (54%), New Media (19%) and Clean Technology (10%) were the media following well behind at 19% and top three sectors for accelerators clean technology at 10%. • Companies embedded in the accelerators surveyed have received a total of $13.65M in investment from Angels, VC, BDC’s convertible debenture, and other government funding both post and prior to graduation.                                                                                                                                         3 This data set is limited with 4 of the 8 reported exits having complete data. The incomplete data set is partially a result of confidentiality issues and data gathering issues by the group managers from the group members. During the phone interviews with 15 out of the 20 Angel groups, Angel group managers were asked whether they had an exit to report in 2012, be it successful or unsuccessful. This then confirmed that all exits were captured in this year's report. It must be noted that the Angel community in Canada is young, and that these data sets are expected to improve over time. Page 9  
  • 10.   The 2012 Report on Angel Investing Activity in Canada   1 Introduction Angel investors are often experienced, well-educated, high-net-worth individuals who invest personal funds in the businesses of unrelated individuals. Angel investors are frequently former entrepreneurs or business professionals who have much to offer to new businesses in terms of financing, networks and mentorship. In this year’s Report, the definition of an Angel investor has been slightly changed from the term “business Angel” used in the 2011 Report. However, this change from “business Angel" to “Angel investor” did not affect the survey results and reflects the term more widely used in the industry across North America. It is well known that Angel investors – both as individuals and in networks – play an important role in the Canadian entrepreneurship ecosystem. In Canada, there are approximately 500,000 accredited 4 investors , but only a fraction of these investors choose to actively invest in early-stage companies. Angel investors often invest alone, but increasingly investors are joining Angel groups where they can find investment opportunities and leverage the knowledge and experience of other Angels in that network. There are currently more than 30 identifiable Angel groups/networks in Canada that come in a range of structures that reflect their local investment environment. These groups represent approximately 1000 5 Angel investors . Angel group/network investing is a relatively new phenomenon in Canada, one that is making a significant contribution to support the Canadian entrepreneurship ecosystem. Typically, Angel organizations can be grouped into four categories: formal non-profit Angel • There are over 30 identifiable investor networks; informal Angel investor clubs; Angel investor Angel groups/networks in Canada. funds; and family offices. All four types of Angel group structures were approached in the 2012 Report. These organizations differ significantly in terms of legal structure, management structure, membership policies, services provided and level of involvement in the investment process. However, it is important to note that only accredited investors are accepted into these organizations. Another emerging phenomenon in early stage financing are business accelerators. Accelerators provide start-up companies with the services and training they need to successfully grow in national or global markets. Since Angel investing is one of the main forms of accessible investment to growth-oriented companies to finance their operations, accelerators play an integral role in bridging the relationship between entrepreneurs and Angel investors. Angels looking to invest in a company can begin to cultivate relationships with start-ups and can mentor the entrepreneurs from a very early stage.                                                                                                                                         4 As defined by the National Instrument 45-106. The Ontario Securities Commission. (2012). OSC Exempt Market Review: OSC Staff Consultation Report Paper 45-710, Considerations for New Capital Raising Prospectus Exemptions. Toronto: OSC 5 Throughout this report, when referring to Angel groups/networks, we are referring to a forum with some membership of several individuals that meet regularly to review investment opportunities and make Angel-stage investments.     Page 10  
  • 11.   The 2012 Report on Angel Investing Activity in Canada   2 Canadian Angel Group Activity 2012 Survey Methodology This is the third annual survey of Canadian Angel groups. The online survey was distributed through FluidSurveys in January 2013 to 24 Angel groups who are members of NACO. As previously stated, NACO is continuously seeking to expand participation in this study. The response rate for 2012 remained high with 83% (or 20 Angel groups) providing data. Following survey completion, telephone interviews were conducted with 15 of the respondents in order to clarify some of the information provided. Note that while some Angel groups are working towards improved record keeping, the lack of administrative support has sometimes resulted in incomplete survey responses. In addition, some groups were only able to report aggregated data and not data on individual investments. Also, survey collection for two groups from Ontario was collected through the Network of Angel Organizations-Ontario (NAO-O) with the permission of the Angel group managers. Please see Annex I for the survey instrument. The survey data results make it possible to compare the Angel market and investment trends in 2012 with previous years. The following new questions were added to this year’s survey: • • • • • • Where does your Angel group generally make investments? What key industry sectors does your Angel group target for investment? How many meetings does your Angel group hold per year? How many companies are generally discussed per meeting? Number of full-time employees at investment. Number of full-time employees at exit. As indicated in the 2011 Report, NACO has taken initial steps to gather additional data from super-Angels and self-identified individual Angels visible to NACO. Further, NACO has also taken steps to gather additional data from accelerators/incubators in the ecosystem. The remainder of this section provides a description of the 2012 survey results, with the discussion grouped into the following three themes: 1. Angel Group Characteristics 2. Angel Group Investments in 2012, and 3. Angel Group Exits in 2012 2.1 Angel Group Characteristics   2.1.1 Age of Angel Groups Although there are a couple of long-established groups in Canada, the oldest was established in 1997. Canadian Angel groups are young. The majority (75%) of Angel groups in Canada have been in operation for less than five years (Figure 1). In 2011, 63% of Angel groups were less than four years old. The median age of Angel groups has remained constant at three years (while the average age increased slightly from 3.7 to 4.4 years in 2012). Page 11  
  • 12.   The 2012 Report on Angel Investing Activity in Canada   There were some changes in the composition of the survey responders from 2011 to 2012. First, three Angel groups which had not previously participated in the survey participated in the 2012 iteration, while three other groups that had participated in the 2011 survey did not participate in 2012 survey including two groups which had disbanded in 2012 (in Ontario and in Western Canada). While the 2011 iteration of the survey noted five new Angel groups having been formed over the year, there were no new groups formed in 2012. Number of Groups F1: Years in Operation 6! 4! 2! 0! 1 Yr 2 Yrs 3 Yrs 4 Yrs 5 Yrs 6 Yrs 7 Yrs 8 Yrs 9 Yrs 10 Yrs 11 Yrs 12 Yrs 13 Yrs 14 Yrs 15 Yrs Number of Years in Operation F2: Percentage of Angel Group Members with Entrepreneurial Background 5% 40% 1 to 25% 30% 26 to 50% 51 to 75% 25% 2.1.3 2.1.2 Total: 20 Groups Entrepreneurial Background of Angels Consistent with the literature and almost identical to 2011 findings, a majority of Angel groups (65%) indicated that over half of their members are either current or former entrepreneurs (Figure 2). This is important as Angel investors often provide investees with advice, mentorship and access to networks that support the development of the investee companies. 76 to 100% Method of Operation Angels tend to share the responsibility of due diligence with other Angel group members while also maintaining a degree of independence. 55% of the Angel groups made investments as individuals with due diligence performed collectively by the group investors, while 25% of Angel groups made investments as individuals with due diligence performed by individual Angels (Figure 3). This is consistent with findings in both 2010 and 2011 where the majority of groups operate on the basis of individual members investing autonomously. F3: How Angel Groups Make Investments Both as a group and as individual s 20% Mostly as individual s: Based on individual due diligence 25% Mostly as individual s: Based on group due diligence 55% Page 12  
  • 13.   The 2012 Report on Angel Investing Activity in Canada   2.1.4 Total number and Size of Angel Groups Nine of the 20 Angel groups had less than 50 Angel members (Figure 4). According to the Angel Resource Institute, the optimal size for an Angel group is between 26 and 50 members. This size permits the group to raise a sufficient amount of capital, but not experience a heavy administrative overhead. In this regard, 25% of Angel groups in 2012 had a group size of between 26 and 50 members. F4: Angel Group Membership Size Distribution, 2012 Number of Groups 6 5 4 3 2 1 0 1 to 10 11 to 25 26 to 50 51 to 75 76 to 100 Over 100 Range of Members in Angel Groups In 2011, the vast majority of groups (about 70%) had fewer than 50 members, indicative of an overall increase in Angel group size from 2011 to 2012 (see Figure 5). Number of Groups F5: Comparison of Angel Group Size Ranges 2010-2012 10 5 0 1 to 10 11 to 25 26 to 50 51 to 100 Over 100 Range of Members in the Angel Group (at end of year) 2010 2.1.5 2011 2012 Activity Level in 2012 An Angel group with a large number of members does not necessarily result in a large number of active members (Table 1). In 2012, 30% of Angel groups indicated that fewer than 10 members invested in 2012 (Figure 6), compared to 57% in 2011. In 2012, 20% of Angel groups indicated that between 51 and 100 Angel group members made investments, an increase in Angel group member investment activity over 2011. Of the 20 Angel groups that provided data, approximately 500 members made investments in 2012. Page 13  
  • 14.   The 2012 Report on Angel Investing Activity in Canada Number of Groups   F6: Activity Level of Angel Groups, 2012 10 5 0 0 1 to 10 11 to 25 26 to 50 51 to 100 Over 100 Size Range (# of Active Members/Angel Group) 40% of respondents indicated that they hold seven to ten meetings per year to discuss about three firms per meeting. This is slightly less frequent than that reported by the US Angel Resource Institute 2011 data indicating that a majority of US groups hold 11-12 meetings a year to discuss two firms per meeting. Table 1: Size of Angel Group (Y) versus Number of Active Members in 2012 (X) Size of Angel Group 2.1.6 Ranges 1 to 10 11 to 25 26 to 50 51 to 100 Over 100 Number of Active Members in Group 1 to 10 11 to 25 26 to 50 51 to 100 0 1 2 4 Over 100 1 3 1 1 2 2 2 1 Demand for Funding and Investment Activity The number of business plans received and the number selected for due diligence varies considerably for each Angel group (Table 2). The majority (70%) of Angel groups received more than 50 business plans in 2012 - with 35% receiving over 100 plans. In 2012, 15.3% of the submitted business plans were selected for further due diligence by Angel investors, an increase from 14.9% in 2011. There was also an increase in both the number of business plans funded as a proportion of those selected for due diligence (47% vs. 44%) and in the number of business plans funded as a proportion of those received (7.3% vs. 6.5%), see Table 3. Table 2: Business Plans Received (Y) vs. Those Selected for Due Diligence (X) in 2012 Business Plans Selected for Due Diligence Business Plans Received Ranges 0 1 to 5 6 to 10 11 to 25 26 to 50 51 to 100 100+ 0 1 to 5 6 to 10 11 to 25 26 to 50 4 1 1 1 1 5 51+ 1 1 1 2 2 Page 14  
  • 15.   The 2012 Report on Angel Investing Activity in Canada   Table 3: Yield Rates 6 Yield Rates 'Presentation Rate': business plans selected for review as a proportion of those received 'Success Rate': business plans funded as a proportion of those selected 'Funding Rate': business plans funded as a proportion of those received. All three indicators (Presentation Rate; Success Rate and Funding Rate) have increased slightly each year of the survey suggestive of improved quality of business plans and investment opportunities. 2.1.7 2010 13.9% 2011 14.9% 2012 15.3% 32.2% 4.5% 43.9% 6.5% 47.4% 7.3% F7: Location of Investments 2012 Same Province (different City) 27% Unknown 34% Targeted Location of Investment As shown in Figure 7, the majority (95% in 2012) of Angel groups generally invest in local companies whether it is within their city (35%) or within their province (60%). This is a trend that is consistent with prior years. Proximity allows for more rigorous and active monitoring of portfolio companies for Angels. Rest of Canada 2% Same City 37% Number of Investments (total = 139) F8: Location of Angel Group Versus Location of Company HQ, 2012 50 43 36 40 31 30 16 20 10 7 2 1 1 2 0 Eastern Canada Central Canada Western Canada Region In City In Province In Region Out of Region Unknown                                                                                                                                         6  Angel group managers provided all info by selecting a range of numbers. Yield rates were calculated by using the middle number in the range. Page 15  
  • 16.   The 2012 Report on Angel Investing Activity in Canada   2.2 2.2.1 Investments in 2012 Number and Value of New and Follow-on Investments A total of 19 groups provided full, partial or aggregated information on their investments in 2012. One group had no deals to report. One Angel group that had over-reported its investment activity in previous years revised its methodology in 2012 to correct this problem. In this report, this correction was applied to the 2011 and 2010 data as well. This study has captured a total of 139 investments (102 new, 30 follow-on and seven unknown) for a total value of $40.5M ($28.9M new, $7.3M follow-on and note that three groups have aggregated data totalling $4.3M) invested by Canadian Angel group members. In 2011 there were 71 investments (52 new and 19 follow-on) with a total value of $35.7M (see Figures 9 and 10). F9: Three year Comparison of New and Follow-on Investments in Canada Number of Investments 120 102 100 80 60 55 52 30 40 20 19 11 0 2010 New 2011 Year Follow-on Not Specified 2012 Again this year, Angel groups were primarily making new investments, with 77% of the investment value 7 in 2012, up from 73% new investments in 2011 .                                                                                                                                         7  Company valuation is difficult to calculate and only roughly 25% of investments reported valuations. The valuation was calculated by multiplying the amount invested by the percentage of equity received for that amount. Page 16  
  • 17.   The 2012 Report on Angel Investing Activity in Canada   Investment Value (millions) F10: Three year Comparison of the Total Value of Angel Group Investments in Canada $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $- $28.90 M $20.80 M $14.90 M $13.82 M $7.30 M $4.30 M $1.14 M 2010 2011 New 2012 Year Follow-on Not Specified Average Investment Amount 2011 saw 71 investments totalling $35.7M and 2012 had 139 investments totalling $40.5M (Figure 10). This is a 96% increase in the number of deals reported from 2011 to 2012 and a 13% increase in the value of the investments reported, indicating that Canadian Angels are making more investments, but at smaller amounts. The average investment size in 2012 was $313,935, which is 38% lower than in 2011, but remained 15% higher than that seen in 2010 (Figure 11). F11: Three Year Comparison of Average Investment Size $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $- $506,679 $313,935 $271,992 2010 2011 2012 Year Finally, a corollary of the increased size of Angel groups and number of investments is the fact that the number of groups which made between 0 and 5 investments decreased from 70% in 2011 to 53% in 2012 (Figure 12). Meanwhile the percentage of groups making over 10 investments grew from 8% to 25% in 2012. Together, these trends appear to suggest that the visible Angel market in Canada is becoming increasingly active. Page 17  
  • 18.   The 2012 Report on Angel Investing Activity in Canada   F12: Number of Investments Made by Groups in 2012 5 Groups (25%) made between 11 to 25 investments 1 Group (5%) made no investments 9 Groups (45%) made between 1 to 5 investments 5 Groups (25%) made between 6 to 10 investments F13: Number of Investments Made by Groups in 2011 3 Groups (13%) made no investments 1 Group (4%) made between 26 to 50 investments 1 Group (4%) made between 11 to 25 investments 13 Groups (57%) made between 1 to 5 investments 5 Groups (22%) made between 6 to 10 investments Page 18  
  • 19.   The 2012 Report on Angel Investing Activity in Canada   2.2.2 Top 5 Angel Groups in Canada for 2012 The Top 5 Angel Groups in 2012 by dollar amount invested: 1. 2. 3. 4. 5. Golden Triangle Angel Network Angel One Network Northern Ontario Angels Capital Angel Network VANTEC The Top 5 Angel group in 2012 by number of investments made (T1 indicates that the first 3 groups are tied with an equal number of investments): T1 T1 T1 4. 5. 2.2.3 Angel One Network Northern Ontario Angels Capital Angel Network Golden Triangle Angel Network WUTIF Capital Co-Investment Activity Angels often co-invest alongside other investors. 27% of the investments captured in 2012 involved a coinvestor, 20% of the investments had no co-investors and 53% of the investments reported did not indicate whether co-investors were involved. The total amount invested by co-investors alongside Angel groups in 2012 was $29.7M, 7% lower than 8 the $31.8M co-invested reported in 2011 . In addition, average co-investment in 2012 was just over half of the level seen in 2011 ($757,226 in 2011 compared to $385,604 in 2012). When co-investors participated, the majority of deals (54%) had fewer than 10 co-investors involved. The types of coinvestors included individual Angel investors (37%), Angel investors associated with other groups (i.e. syndicated investment) (35%), venture capital (17%), and institutional Angel investors (9%) (Figure 14). Note that 'other' represents a combination of ‘family and friends’ and Angel groups outside of Canada.                                                                                                                                         8  In 2011, 54% of investments reported did not indicate whether co-investment was involved. This is comparable to 53% of investments in 2012. Page 19  
  • 20.   The 2012 Report on Angel Investing Activity in Canada   F14: Types of Co-investors, 2012 Institutional Angel Investor 9% Other 2% Venture Capital (general) 17% Individual Angel Investors 37% Angel Investors associated with other groups 35% 2.2.4 Number and Value of Investments by Region Similar to 2011, the vast majority (82%) of Angel group activity that has been captured occurred in Central Canada – where the groups making the investments are based in Ontario and Quebec, totalling $33.4M in 115 investments. The remaining investments captured originated in Western Canada (16%) 9 totalling $6.5M and in Eastern Canada (2%) for a total of $670K (see Figures 15 and 16) . The average value invested in Western Canada almost tripled, from $118K in 2011 to $449K in 2012. Conversely, the average value invested in Central Canada in 2012 was half of that in 2011 ($617K in 2011; $309K in 2012). In Eastern Canada the average investment also decreased from $286K in 2011 to $223K in 2012. The average co-investment value by region revealed identical trends as co-investment in Western Canada rose by 120% (from $222K in 2011 to $491K), decreased in Central Canada by 46% (from $724K to $388K) and fell in Eastern Canada by 38% (from $357K in 2011 to $220K in 2012).                                                                                                                                         9 Note: Figures 15, 16, and 17 represent where the Angel group that provided the investment is located, not the location of the company that received the investment. Page 20  
  • 21.   The 2012 Report on Angel Investing Activity in Canada   F15: Number of Investments by Region, 2012 F16: Total Value of Investments by Region, 2012 140 $40,000,000 115 Value of Investment Number of Investments 120 100 80 60 40 21 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 20 $33,364,200 $35,000,000 $6,516,331 3 $670,400 $5,000,000 0 Western Canada Central Canada Eastern Canada $- Western Region Central Eastern Region Average Amount invested (thousands) F17: Three Year Comparison of Average Value of Investments by Region $700 $617 $600 $524 $500 $449 $400 $300 $200 $309 $212 $286 $202 $223 $118 $100 $Western Canada Central Canada Eastern Canada Year 2010 2011 2012   Page 21  
  • 22.   The 2012 Report on Angel Investing Activity in Canada   F18: Average Value of Co-investment by Region, 2012 Average Investment Value $600,000 $500,000 $490,714 $387,825 $400,000 $300,000 $220,000 $200,000 $100,000 $0 Western Canada Central Canada Eastern Canada Region 2.2.5 Equity Shares and Valuations of Investments The percentage of equity received from investments remains challenging for Angel group managers to track as only 36 deals (covering 25% of total investments) were able to report information on equity. This is due to the fact that the information was not available to the Angel group managers as some investments take the form of convertible debentures and liens on equipment. However, the average 10 percentage equity received for 2012 for those able to report was 19%, up from 17% received in 2011 . Using the information reported on equity, valuations of the companies receiving investment were calculated. The median value was $1.55M and the mean value was $2.06M. These averages serve to provide insight into the typical value of the investments made. 2.2.6 11 Comparison of Investment Activity by Sector Angel groups invested in the following top three industry sectors in 2012: ICT (57 investments), life sciences (20 investments), and clean technology as well as diversified industries each representing nine investments (see Figure 19). Notably, there has been an increase in the number of investments for both the communications and media sector from 0 in 2011 to two investments in 2012 and the new media sector from two investments in 2011 to six investments in 2012.                                                                                                                                         10 The exit data received is thin, however, this report is new (third year) and we anticipate exit data will improve over time. The ICT sector includes: software, communications & networking, wireless & mobile, E&M commerce, internet focus/web2.0, electronics & computers, and semiconductors. The new media sector includes game development and social media platforms. The Communications & Media sector includes telecommunications and film. The Clean technology sector includes: alternate/clean energy, hardware, energy infrastructure, energy informatics, smart grid, and environmental technology. Diversified industries include: automotive, defence, fisheries and aquatics, tourism, business products, consumer products, and retail. The Life sciences sector includes: biopharmaceuticals/drugs, medical/biotechnology software, medical devices & equipment, healthcare, and bioagriculture. The traditional industries sector includes: financial services, mining, oil & gas, real estate, and utilities & pipelines.   11 Page 22  
  • 23.   The 2012 Report on Angel Investing Activity in Canada   When examining the total dollar amount invested by Angel groups per sector ICT ranks first having attracted 54% of total investment value (or $17.9M), life sciences second having attracted 23% (or $7.5M) and clean technology third having attracted 10% of total investment (or $3.2M), see Figure 20. (Also note that Angel groups could not identify a sector for $7.5M worth of investments). These are the same top three sectors as found in 2011: ICT, life sciences, and clean technology. Number of Investments F19: Comparison of Number of Investments by Sector 60 50 40 30 20 10 0 ICT Clean Technology Life Sciences Diversified Industries Traditional Industries New Media Communica tions and Media 2010 28 7 4 9 4 4 1 2011 32 6 18 7 3 2 0 2012 57 9 20 9 0 6 2 Diversified Industries 3% F20: Value of Investments by Sector, 2012 Communications & Media 7% New Media Other 2% 1% Clean Technology 10% ICT 54% Life Sciences 23% Page 23  
  • 24.   The 2012 Report on Angel Investing Activity in Canada   2.2.7 Types of Government Programs Involved in the Investment A large portion (53 or 38%) of investments leveraged government programs. The top three government programs leveraged by Angel groups were: FedDev Ontario's Investing in Business Innovation program (33%), Northern Ontario Heritage Fund Corporation (21%), and the National Research Council’s Industrial Research Assistance Program (NRC-IRAP) (17%) see Figure 21. Note that several investments leveraged more than one government program. Other government programs used to support Angel group investments in 2012 include: BC's Investment Tax Credit (6%), Ontario Centres of Excellence (4%), Sustainable Development Technology Canada (2%), Regional Economic Intervention Fund (Quebec's FIER, 1%), and ACOA’s Business Development Program (1%). This is the first year for the collection of this data, meaning that it is too early to determine trends. However, this data provides useful insights into program leverage and will continue to be tracked in 12 future. F21: Government Programs Involved, 2012 Sustainable Development Technology Canada (SDTC) 2% Ontario Centres of Excellence (OCE) 4% Regional Economic Intervention Fund (Quebec - FIER) 1% British Columbia Investment Tax Credit 6% None 15% Industrial Research Assistance Program (IRAP) at the NRC 17% ACOA's Business Developent Program 1% Investing in Business Innovation (IBI) at FedDev Ontario 33% Northern Ontario Heritage Fund Corporation (NOHFC) at the Ontario Government 21%                                                                                                                                         12  If more than one government program was used per investment, each program was recorded as utilized. The results were then summed and represented as a form of an average. Page 24  
  • 25.   The 2012 Report on Angel Investing Activity in Canada   2.2.8 Number of Full-Time Equivalent Employees at Investment In another new question in the survey, Angel groups indicated that 44% of their investments included access to the number of FTEs at the time of investment. These responses are expected to improve over time. Ultimately, we intend to track individual investments from start to exit to assess job growth due in part to the injection of capital from Angel groups. The majority of investments (54%) were made to small companies with between one to five full-time equivalent employees (see Figure 22). F22: Number of FTEs at Investment Stage 26 to 50 3% 51 to 99 3% 11 to 25 24% 1 to 5 54% 6 to 10 16% 2.3 Exits in 2012 There were a total of eight exits reported in 2012 by Angel groups in Canada (the same number as captured in 2011). Three exits were in consumer products, two in ICT, one in marketing and communications, and the last two sectors are unspecified. For seven of these exits the total initial Angel investment was $1.87M (one was unspecified). 2.3.1 Length of Investment before Exit Note that 87% of Angel group investments took three years or less to mature before exit (see Figure 23); whereas more than four years to exit was reported in 2011. The time needed to exit will be examined in future surveys to assess the factors in determining this length. Page 25  
  • 26.   The 2012 Report on Angel Investing Activity in Canada   F23: Length of Time to Exit 6 Yrs 13% 1 Yr 25% 3 Yrs 25% 2 Yrs 37% 2.3.2 Return on Investment (ROI) With such a small data set (seven disclosed exit events) for which we do have complete comparable information, it is not possible to form a conclusive analysis on investor ROI. However, the total amount invested in the four recorded exits was $1.87M. These same companies returned a total of $2.35M to their Angel Group investors. One of these companies returned almost seven-fold the Angel members’ original investment (i.e. a home run). Two of these investments generated a positive return, one generated a negative return and the last investment was neutral. 2.3.3 Method of Exit Two companies ceased operations with one generating a negative return and the other recovering the investment capital through the sale of equipment to another company. The remaining six exits were equally split three ways between sale to/merger with another company (25%), sale to new shareholder (25%) and sale to other existing shareholders (25%), see Figure 24. F24: Method of Exit in Canada, 2012 Company ceased operations 25% Sale to new shareholders 25% Sale to/merger with another company 25% Sale to other existing shareholders 25% Page 26  
  • 27.   The 2012 Report on Angel Investing Activity in Canada   2.3.4 Number of Full-Time Equivalent Employees at Exit Employment data was captured for six of the eight exits. One firm which had exited had less than six employees, three of the firms which had exited had less than 10 employees, and two of the firms which had exited reported between 11 and 25 employees (see Figure 25). Our eventual goal is to track investments from initial investment to exit to demonstrate job growth attributable to and associated with Angel investments. Number of Exits F25: Number of FTEs at Exit 4   3   2   1   0   1 to 5 6 to 10 11 to 25 26 to 50 51 to 99 Number of FTEs Emloyed by the Company at Exit Page 27  
  • 28.   The 2012 Report on Angel Investing Activity in Canada   3 Best Practices and Challenges During the interviews conducted with Angel group managers, they identified the following best practices which contributed to their success in 2012: ü Good record keeping: To monitor the success and/or failures of investments (to measure return on investment (ROI) and improve the Angel groups’ track record). ü Regularly scheduled meetings: To help increase the activity level of the Angel group and its members. One Angel group indicated informal meetings were viewed as positive. ü Syndication: To diversify the risk associated with a single deal, an increase in the number of Angels involved in the investment and the number of deals in a portfolio. ü Clarity of investment processes: To minimize lengthy, ad hoc investment processes that can lead to complications when multiple investors are involved. ü Disciplined processes: As a means to improve deal flow and as a screening mechanism, members use disciplined processes (including a sneak preview, after which the entrepreneur must find a sponsor to give a full presentation to Angel investors). ü Collaborating with experts: To improve the due diligence process, Angel groups are exploring options including working with experts at local universities or serial entrepreneurs in order to ensure that the proper expertise is involved in vetting deals. ü Collaborating with other partners in the ecosystem for screening purposes: To save time and complement existing resources, some Angel groups have partners who screen presentations and weed out those that are not yet ready. Angel group managers also identified the following challenges facing their groups: ü Lack of support funding: Many groups rely on membership fees to support operations, while some are fortunate to receive funding support from regional development agencies and corporate sponsors. A number of groups indicated that they rely on the work of volunteer members, which can lead to member fatigue. As such, group managers indicated that increased government funding is needed to support the group’s efforts to organize investment meetings, recruitment events and administrate the group. ü Investor fatigue: A main challenge for a number of Angel groups is the length of time to exit. Long investment time horizons restrict the Angels' ability to re-invest in new companies. The lack of re-circulation of funds means groups must recruit new membership in order to remain active. Much of the Angel group managers’ time is spent seeking new membership in an attempt to address investor fatigue. ü Quality of supply: Finding a well-managed company with a high potential for growth and can get to an exit faster is an ongoing challenge for investors. Some groups are addressing this by setting up strategic partnerships with local organizations that support entrepreneurs. Page 28  
  • 29.   The 2012 Report on Angel Investing Activity in Canada   4 Accelerators Accelerators are organizations that provide selected entrepreneurs with seed-investment and intense structured mentorship, business education and access to business networks for a finite period of time, usually in exchange for equity in the entrepreneur’s venture. Angels often look to accelerators to identify F26: Investee Companies Industry Sectors investment opportunities and for an opportunity to Diversified Life participate in subsequent seed financing opportunities in Industries Sciences 3% portfolio companies. 9% For the first time, this Report surveyed six accelerators across Canada all of which use a cohort model to screen and select entrepreneurs (the medium intake per accelerator is two cohorts per year). The median number of companies typically accepted into a cohort is five. In 2012, approximately 52 companies were accepted into five of the accelerators (note that the number of companies in the cohort for one accelerator was not provided). The investee companies were predominantly in ICT (59%), with new media following well behind at 19% and clean technology at 10% (Figure 26). 4.1.1 Clean Technology 10% New Media 19% ICT 59% Access to Capital All of the surveyed accelerators indicated that they provided capital to companies in exchange for equity. Four of the six surveyed accelerators were located in Ontario, one in Quebec and one in British Columbia. Note that one of the accelerators stated that they took a mixture of company equity and debt. The median investment amount by the five accelerators that disclosed this information was $50K per company with investments ranging between $20K and $80K. The source of this funding comes primarily from VC investors with minor amounts from Angel investors and government and in one case from the Canadian Youth Business Foundation (CYBF). For one accelerator funding came exclusively from government sources. 4.1.2 Supply and Demand Since their inception, the surveyed accelerators have accepted a total of 102 companies to use their services (median of 16.5 companies per accelerator). Note that most of the accelerators surveyed are young and have only been established for a few years. The accelerators reported receiving a total 3,370 applications in 2012 (a median of 500 applications per accelerator). From these, the accelerators then accepted a total of 83 applicants (an average of 13 companies per accelerator). Thus, demand is high from entrepreneurs for the services provided by accelerators. Looking forward to 2013, five out of the six accelerators intend to accept a total of 66 companies (a median of 10 companies per accelerator). Page 29  
  • 30.   The 2012 Report on Angel Investing Activity in Canada   4.1.3 Company Investment Details F27: Total Amount of Investment $13.65M Of the six accelerators, four Angels before provided further details on Nongrad investments into each company Government 3% after grad that was accepted into their 3% program in 2012, covering a total of 40 companies. Investments Nonprior to graduation and after Government before grad graduation reached a combined 5% $13.65M and came from the Business Development Bank of Angels after grad Canada (BDC), Angels, VCs, 13% government and non-government sources. Note that all of the VCs after grad accelerators surveyed are linked 18% closely to BDC, which provides follow-on convertible debenture funding to select graduate firms of accelerators. BDC Convertible before grad 1% Government after grad 1% BDC Convertible after grad 31% VCs before grad 25% The largest share of investment in accelerator-backed firms came from VC funds before and after graduation, accounting for a total of 43% or $5.8M, followed by BDC convertible note investments after graduation at 31% or $4.2M, and angel investments before and after graduation at 16% or $2.2M (Figure 27). The largest average investments came from VC funds after graduation at $612K, followed by angel investments after graduation at $153K and BDC convertible notes after graduation at $145K. Amount Invested (CDN) F28: Average Amount Invested by Investee 700000 600000 500000 400000 300000 200000 100000 0 612,500 153,179 145,345 107,375 90,500 63,182 Investee Type Page 30  
  • 31.   The 2012 Report on Angel Investing Activity in Canada   5 Conclusions It is important to stress again that this is not a survey of the entire Angel marketplace. Rather, the Report provides a window into the activity level of 'visible' Angels, namely Angel groups. Nevertheless, the following points have emerged from the survey: 1. The market of Canadian Angel groups is very young with 75% of Angel groups having been established within the previous five years (since 2007). 2. 2012 saw a total of 139 investments totalling $40.5M compared to a total of 71 investments totalling $35.7M in 2011. From 2011 to 2012, there was a 96% increase in the number of Angel deals with a 13% increase in the value of these investments. 3. The highest level of activity was in Central Canada which was responsible for $33.4M of the investments or 82% of the deals. 4. Angel investments are concentrated in three sectors: ICT ($17.9M), life sciences ($7.5M), and clean technology ($3.2M). 5. Exits continue to emerge with a total of 8 captured in 2012: one with a negative return, two with successful returns (with one categorized as a 'home run'), and one that was neutral. 6. Accelerators are also relatively new in Canada, and have invested a total of $13.65M in 40 companies both prior and post-graduation in 2012. While this is the third year in which Angel groups in Canada have been surveyed to capture information on their investment and exit activity, both the report and the community it surveys are young. There continues to be significant scope to improve both the coverage and accuracy of data on Angel group investment activity in future years and thereby enhance the value of this Report. Page 31  
  • 32.   The 2012 Report on Angel Investing Activity in Canada   6 Annex I: The Survey Instrument   Overview Thank you for participating in the NACO Annual Angel Investment Activity Report. The Survey is structured into 3 parts as follows: Angel Group Profile Investment Profile Exit Profile Your contribution will be added to those of Angel groups and co-investors from across Canada to provide the third comprehensive yearly report on Angel investing. Please note that all responses will be kept strictly confidential and will be analysed only in aggregate. No individual information will be released about investors or your investments. Survey Respondent Name Email Angel Group Name City Province British Columbia Ontario Prince Edward Island Alberta Quebec Saskatchewan Nova Scotia Newfoundland and Labrador Manitoba New Brunswick Postal Code or Address Page 32  
  • 33.   The 2012 Report on Angel Investing Activity in Canada   Part 1: Angel Group Profile 1.1. In what year was {{ Name }} established? 2012 2004 1994 2011 2003 1993 2010 ... 3 additional choices hidden ... 1992 2009 2008 2007 2006 2005 1998 1997 1991 1990 Prior to 1990 1996 1995 1.2. How many members were in {{ Name }} at the end of 2012? 0 26 to 50 1 to 10 51 to 75 11 to 25 Over 100 76 to 100 1.3. How many members made investments through the {{ Name }} during 2012? 0 26 to 50 1 to 10 51 to 75 11 to 25 Over 100 76 to 100 1.4. What percentage of {{ Name }} members are current or former entrepreneurs? 0% 26 to 50% 1 to 25% 76 to 100% 51 to 75% 1.5. Where does {{ Name }} generally make investments? Page 33  
  • 34.   The 2012 Report on Angel Investing Activity in Canada   Same City Rest of Canada Same Province (different City) World USA 1.6. What key industry sectors does {{ Name }} generally target for investment? Please select all that apply (hold the Ctrl key). ICT: Software Life Sciences: Med/Biotech Software Traditional Industries: Financial Services Life Sciences: Medical Devices & Equip Traditional Industries: Mining ICT: E&M Commerce Life Sciences: Healthcare Traditional Industries: Oil & Gas ICT: Internet Focus/Web2.0 Life Sciences: Bioagricultrue Traditional Industries: Real Estate ICT: Electronics & Computers Diversified Industries: Automotive Traditional Industries: Utilities and Pipelines ICT: Semiconductors Diversified Industries: Defence New Media: Game Development Diversified Industries: Fisheries & Aqua New Media: Social Media Platforms Diversified Industries: Tourism Communications and Media: Telcos Diversified Industries: Business Products Communications and Media: Film Diversified Industries: Consumer Products Other (please specify) ICT: Comms & Networking ICT: Wireless & Mobile Clean Technology: Alternate/Clean Energy Clean Technology: Hardware Clean Technology: Energy Infrastructure Clean Technology: Energy Informatics Clean Technology: Smart Grid Clean Technology: Environmental Tech Life Sciences: Biopharma/Drugs Diversified Industries: Retail Forestry Products: Silvaculture Page 34  
  • 35.   The 2012 Report on Angel Investing Activity in Canada   1.7. How many meetings does the {{ Name }} hold per year? 0 4 to 6 11 to 12 1 to 3 7 to 10 13+ 1.8. How many firms are generally discussed per meeting? 0 3 1 4 2 N/A 5+ 1.9. How many business plans did the {{ Name }} receive from firms seeking financing in 2012? 0 11 to 25 1 to 5 26 to 50 6 to 10 100+ 51 to 100 1.10. How many investment opportunities were selected for formal due diligence in 2012? 0 11 to 25 1 to 5 26 to 50 6 to 10 100+ 51 to 100 1.11. How do you/your Angel group make investments? What is your approach to investing? Mostly as individuals: Based on group due diligence Mostly as individuals: Based on individual due diligence Mostly as a group: Members pledge funds to be invested through group decisions Mostly as a group: Members' capital is pooled in a single fund Both as a group and as individuals: 1.12. How many investments (new and/or follow-on) did your group make in 2012? Page 35  
  • 36.   The 2012 Report on Angel Investing Activity in Canada   0 6 to 10 1 to 5 26 to 50 11 to 25 1.13. What was the total value of investments (new and/or follow-on) made in 2012? $0 $501K to 750K $5.1M to 10M $1 to 150K $751K to 1M $10.1M to 20M $151K to 250K $1.1M to 2M $20.1M to 50M $251K to 500K $2.1M to 5M Over $50M 1.14. How many active firms, for which {{ Name }} members retain an equity stake, remain in your group's portfolio at the end of 2012? 0 26 to 50 1 to 10 51 to 75 11 to 25 100+ 76 to 100 1.15. What was the total value of your group's investments in active firms at the end of 2012? $0 $1.1M to 2M $51.1M to 100M $1 to 150K $2.1M to 5M $101M to 200M $151K to 250K $5.1M to 10M $200M + $251K to 500K $10.1M to 20M $501K to 1M $20.1M to 50M 1.16. How many exits did your group make in 2012? 0 4 8 1 5 9 2 6 10 3 7 10+ Page 36  
  • 37.   The 2012 Report on Angel Investing Activity in Canada   1.17. What was the total value to your group (CDN received by members) from exits made in 2012? $0 $1.1M to 2M $51.1M to 100M $1 to 150K $2.1M to 5M $101M to 200M $151K to 250K $5.1M to 10M $200M + $251K to 500K $10.1M to 20M $501K to 1M $20.1M to 50M Page 37  
  • 38.   The 2012 Report on Angel Investing Activity in Canada   Part 2: Investment Profiles in 2012 Please provide the following information for each investment made through your group in 2012. ***NOTE: THIS SECTION WILL LOOP (REPEAT UP TO 20) FOR HOWEVER MANY INDIVIDUAL INVESTMENTS YOU HAVE TO REPORT. 2.1. Was the investment made: New Follow-on 2.2. Amount invested by members of {{ Name }} (CDN): 2.3. Number of {{ Name }} members who invested: 2.4. Percent of equity received by your investors (%): 2.5. Number of co-investors who also invested (syndicated investments between your group and other Angels, Angel groups, venture groups, etc.)? 0 6 to 10 26 to 50 1 to 5 11 to 25 51+ 2.6. Type of co-investor involved in the investment. Please select all that apply: Individual Angel Investors Angel Investors associated with other Angel groups Page 38  
  • 39.   The 2012 Report on Angel Investing Activity in Canada   Institutional Angel Investor Venture Capital (general) Labour Sponsored Venture Capital Cooperation BDC Venture Capital Other, please specify... ______________________ None 2.7. Amount invested by co-investors (CDN) 2.8. Type of Government programs involved in the investment (select all that apply): Investing in Business Innovation (IBI) at FedDev Ontario Ontario Centres of Excellence (OCE) Health Technology Exchange (HTX) Regional Economic Intervention Fund (Quebec - FIER) Sustainable Development Technology Canada (SDTC) Industrial Research Assistance Program (IRAP) at the NRC Northern Ontario Heritage Fund Corporation (NOHFC) at the Ontario Government NSERC British Columbia Investment Tax Credit Other (please specify) ______________________ None 2.9. Did the company your group invested in have sales revenue in 2012? Yes No 2.11. Please provide the city of the company's HQ Page 39  
  • 40.   The 2012 Report on Angel Investing Activity in Canada   2.10. What industry sector does the company represent? ICT: Software Life Sciences: Biopharma/Drugs Forestry Products: Silvaculture Life Sciences: Med/Biotech Software Traditional Industries: Financial Services Life Sciences: Medical Devices & Equip Traditional Industries: Mining Life Sciences: Healthcare Traditional Industries: Oil & Gas Life Sciences: Bioagricultrue Traditional Industries: Real Estate ICT: Semiconductors Diversified Industries: Automotive Traditional Industries: Utilities and Pipelines Clean Technology: Alternate/Clean Energy Diversified Industries: Defence New Media: Game Development Clean Technology: Hardware Diversified Industries: Fisheries & Aqua New Media: Social Media Platforms Clean Technology: Energy Infrastructure Diversified Industries: Tourism Communications and Media: Telcos Clean Technology: Energy Informatics Diversified Industries: Business Products Communications and Media: Film Clean Technology: Smart Grid Diversified Industries: Consumer Products Clean Technology: Environmental Tech Diversified Industries: Retail ICT: Comms & Networking ICT: Wireless & Mobile ICT: E&M Commerce ICT: Internet Focus/Web2.0 ICT: Electronics & Computers 2.12. Number of Full Time Employees (FTEs) at investment stage: 1 to 5 26 to 50 251 to 499 6 to 10 51 to 99 500+ 11 to 25 100 to 250 Page 40  
  • 41.   The 2012 Report on Angel Investing Activity in Canada   Part 3: 2012 Detailed Exit Profiles Please provide the following information for each new exit made by your group in 2012. ***NOTE: THIS SECTION WILL LOOP (REPEAT UP TO 10) FOR HOWEVER MANY INDIVIDUAL INVESTMENTS YOU HAVE TO REPORT. 3.1. In what year was the original investment made by {{ Name }} members? 2012 2004 1995 2011 2003 1994 2010 ... 2 additional choices hidden ... 1993 2009 2008 2007 2006 2005 1999 1998 1992 1991 1990 1997 1996 3.2. How many rounds of investment were made by {{ Name }} members? 1 5 9 2 6 10 3 7 10+ 4 8 3.3. Total amount invested by {{ Name }} members ($CDN): 3.4. Total amount of cash received by {{ Name }} members prior to exit ($CDN): Page 41  
  • 42.   The 2012 Report on Angel Investing Activity in Canada   3.5. Percent of company equity sold by {{ Name }} members (%): 3.6. Total amount of cash received by {{ Name }} members at exit ($CDN): 3.7. Method of Exit: Sale to/merger with another company Sale to other existing shareholders Sale to new shareholders Others Initial Public Offering Company ceased operations 3.8. What industry sector does the company represent? ICT: Software Clean Technology: Energy Informatics Diversified Industries: Defence Clean Technology: Smart Grid Diversified Industries: Fisheries & Aqua ICT: E&M Commerce Clean Technology: Environmental Tech Diversified Industries: Tourism ICT: Internet Focus/Web2.0 Life Sciences: Biopharma/Drugs Diversified Industries: Business Products ICT: Electronics & Computers Life Sciences: Med/Biotech Software Diversified Industries: Consumer Products ICT: Semiconductors Life Sciences: Medical Devices & Equip Diversified Industries: Retail Life Sciences: Healthcare Forestry Products: Silvaculture Life Sciences: Bioagricultrue Traditional Industries: Financial Services Diversified Industries: Automotive Traditional Industries: Mining ICT: Comms & Networking ICT: Wireless & Mobile Clean Technology: Alternate/Clean Energy Clean Technology: Hardware Clean Technology: Energy Infrastructure Page 42  
  • 43.   The 2012 Report on Angel Investing Activity in Canada   Traditional Industries: Oil & Gas New Media: Game Development Traditional Industries: Real Estate New Media: Social Media Platforms Traditional Industries: Utilities and Pipelines Communications and Media: Film Communications and Media: Telcos 3.9. Total valuation of the company on exit ($CDN): 3.10. Please provide the city of the company's HQ: 3.11. Number of Full Time Employees (FTEs) at exit stage: 1 to 5 6 to 10 11 to 25 26 to 50 51 to 99 100 to 250 251 to 499 500+ Page 43  
  • 44.