Accessing Angel Capital in Canada Presented by The Bulgarian Chamber in Association with The British Chamber and The Belgian Chamber

ACCESSING ANGEL CAPITAL IN CANADA
Special Guest Speaker
GERARD BUCKLEY
Presented by:
CBBN “The Bulgarian Chamber” in association with BCCTC
“The British Chamber” and BCBC “The Belgian Chamber”
In short referred to as The 3 B’s

Accessing Capital From an Angel Investor Network
Your First Professional Investment – Who, What, When, Why, Where and How?

3
• What is Angel Investing
• Who is an Angel Investor
• Why Invest in Early Stage Companies
• Angel Network in Canada
• NACO 2013 Survey
• Angel Investing is a changing
• The Benefits for Entrepreneurs
• Q & A
Agenda
www.mapleleafangels.com | info@mapleleafangels.com | 416.646.6235 | @mapleleafangels

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• I am Gerard Buckley
– Founder & CEO of Jaguar Capital an Advisory Practice for Growth Companies in
Governance, Financial Management & Funding Strategies
– Chairperson of Board of Directors, Maple Leaf Angels Corporation & Investor in eight
early stage companies
– Corporate Director, Maple Leaf Angels Capital Corporation the General Partner of
MLA48LP1 an Angel Backed Pre-seed Investment Fund
– Nominated & Finalist for National Angel Capital’s Angel of The Year in 2014
– Certified Corporate Director of the Institute of Corporate Directors
– Previously Entrepreneur in Residence with Incubes (An Internet Company Accelerator)
– Past member of Small & Medium Enterprise Committee of The Ontario Securities
Commission
– Investment Committee of Mount Saint Vincent University, Halifax, NS
– 32 yr. Career with Scotia Capital as a Financial Risk Management Advisor to Fortune
200 Companies: Rogers, Irving Group, Empire Co., Four Seasons, Bruce Power, OPG,
Province of Ontario, Ford etc.
Who Am I

What is Angel Investing
• Angel Investing is individuals investing their personal
money in the equity or debt of a Early or Growth Stage
Company
• Often referred to as Smart Money, it is where individuals
wish to invest their time or experience as well money in a
start-up company.
• People wishing to give back their experience so others may
benefit which is often referred to as mentoring or serving
on a company Advisory Board or Board of Directors
• Angel Investing is Active Investing not Passive

Who is an Angel Investor
• Angels are investors who leave out the control. They
essentially bundle Advice and Money
• A person prepared to invest their personal or family
money
• A person who can add value to the company
• An accredited investor as defined by OSC 45-106
• A member of an angel network
• The majority of angel investment in Canada is
completed by individuals >85%
• Estimate of Cdn Angel Investment is 916mm in
approx 1500 companies (VC about 2b)

Profile of an Angel - Median
Years investing 9
Number of Investments 10
Total Exits 2
Years as a Entrepreneur 14.5
Number of ventures founded 2.7
Age 57
Percent of net worth 10%
Education Masters Degree
Angel Resource Institute Source: Wiltbank Study 2007

Why Would Someone be an Angel
Investor
• Qualified Opportunities
• Opportunity referral
• Increased Capital Diversification
• High Risk Asset Class …. Seeking High Returns
• Favourable Valuation and Terms in comparison to VCs
• Networking
• Portfolio company mentoring or engagement
• Shared Due-Diligence
• Advisory Board and Board of Director Roles

What Type of Companies Do Angels
Invest In?
• Companies who are in seed and early stage.
• In technology, life sciences, ict, health care
devices, med tech, clean tech, power
solutions, fin tech, …..
• Solve a Problem, Secret Sauce or technology
....... USP, validated business model, Great
management team

Equity Capital Life Cycle

What Angels Look For
• High anticipated growth rate – Scalability
• Experienced management team
• Sustainable competitive advantage
• Barriers to entry ie. Exclusive IP
• Clear strategy for commercialization
• Proof of concept or enterprise level validation
• Business model anchored in Reality
• Investor exit strategy in 5 to 8 years
• Investing in what you know – vertical expertise
• Coach ability of the entrepreneur
• Amount of dilutive capital required

Factors that appear to impact investor
outcome
• Due diligence time: More hours of due diligence
positively related to greater returns (> 40 hours)
• Experience: An angel investor's expertise in the
industry of the venture being invested
• Participation: Angel Investors that interacted
with their portfolio companies at least a couple
of times per month mentoring, coaching,
providing leads and monitoring performance
experienced greater returns.

Selection Criteria
• Pre-seed Investments up to $200k
• Seed investment should be from $250k to $500K
• Early stage investments should be from $350k to $1,500K
• Valuation 1.5 to 4.5 million (Halo 2013 median 2.5m)
• The stage, quality of the management team, valuation
and technology of companies are more important than
the sector criteria
• Quality is more important than quantity
• In Canada 5% of companies get funded (95% don’t)
• In Silicon Valley (1/300) get funded

Angel Network’s in Canada
• NACO – National Angel Capital Organization
• 32 Angel Groups in Canada
• They have collectively over 2100 investors
• Three large groups accounted for 58%
• The majority have fewer than 50 members
• 75% of groups set up since 2007
• 68% not-for-profit, 14% for profit & 18% not incorporated
• Vast majority do volunteer shared due diligence
• 12 Angel Groups in Ontario
• Keiretsu Forum & Golden Horseshoe Venture Forum are Private
For Profit Angel Groups

Canadian Angel Group Investment
Activity 2013
• 199 Investments in 2013 totaling $89 m, an increase from 2012 of
139 investments and a increase in investment from 40.5 m
• Average investment is $504k up fr $314k 2012
• Of over 2100 investors 78% - Ont & Que, 21% West, 1% Atlantic
• ICT (45%), Life Sciences (33%), Clean Tech (13%)
• Valuation – Median $5.0m, Mean 2.06m
• 61% of transactions involved a co-investor
• Of 3775 applications in Canada 5.2% get funded by networks
• Angels in Canada appear increasingly able and willing to provide
follow-on funding to carry companies through to the next stages
of growth

Traditional Angel Network is Changing
• Currently Southern Ontario Angel Investment community has 12
Angel groups
• Government programs ( IAF, MaRS, OCE, IBI)
• Online - Angel List, Syndicates, Funders Club, The Funded, Gust
• Y Combinator, Tech Stars, 500 Start-ups, +110 Accelerators in
Canada …. Consolidation occurring to access gov’t funding
• Incubators & Accelerator funds
• Crowd funding such as kickstarter.com and equity crowd funding
will follow
• Introduction of OM - Offering Memorandum will have an impact
• Super Angels & Micro-VC’s
• “Future of Venture” – unbundling of advice, money and control
• Super Angels & Micro-VC’s

17

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Entrepreneur Benefits
• Large capital source
• Broad pool of Knowledge & Contacts
• Efficient Process
• Capital Connections
• In many provinces there is investor tax credit
• Leverage sources of funding (IAF, IBI, BDC etc.)
• Focus on value-add and advice, not the biggest
cheque

Questions Entrepreneurs Should Ask
Angels or Venture Capitalists
• Where does your deal flow come from?
• Do you charge for presentations? Or charge for due-diligence?
Or Performance Fees?
• How much management Fee do you charge? How much
interest carry do you charge investors?
• How often do you hold pitches?
• Do you help prepare pitches?
• Do you invest together or make a investment decision
separately?
• Do you have a fund or make pre-seed investments?
• Do you disclose your investment process?
• Who will your board nominee be?

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Gerard Buckley, BBA, FICB, ICD.D
President and CEO
Jaguar Capital Inc.
(C) 416-884-9522
g.buckley@jaguarcapital.ca
www.jaguarcapital.ca
Twitter: @jaguarcapital
Twitter: @gerardbuckley
Slideshare: Jaguar Capital
Contact Information

Accessing Angel Capital in Canada Presented by The Bulgarian Chamber in Association with The British Chamber and The Belgian Chamber

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