2014 Report on Angel Investing Activity in Canada

2014 Report on
Angel Investing Activity
in Canada
Harnessing the Power of Angel Investors
Released June 2015

This report was made possible with the financial contributions from:
Authors Acknowledgements
Paul Schure
Department of Economics, University of Victoria
Melissa Dodaro
National Angel Capital Organization
This report is based on the data from the 2014
Canadian Angel Group Survey and follow-up telephone
interviews. All data collection and writing were done
by the authors in conjunction with the 2014-15 Project
Steering Committee.
NACO and the report authors wish to thank the members
of the 2014-15 Project Steering Committee for their
direction, expert advice, and comments. A special
thank you to Thomas Hellmann (Oxford University),
Yuri Navarro (NACO), Younes Errounda (Industry
Canada), Jim Valerio (Industry Canada), Shane Dolan
(Industry Canada), Erika Kurczyn (BDC Capital), Jeri
Ross (KPMG Enterprise), and Karen Grant (Angel One
Investor Network) for leading the direction of the report.
NACO also thanks Industry Canada for providing
additional analysis and content to be included in this
report, and the Network of Angel Organizations -
Ontario for their valued contribution to Ontario data
collection. We would like to recognize David Valliere
(Ryerson University) for peer reviewing a draft version
of this report and providing his insight.
Special acknowledgements go out to the Angel group
managers who volunteered their valuable time to provide
the data for this report – without them there would be
no activity to report.

The National Angel Capital Organization (NACO) is the
industry association championing Angel investors and
their investments across Canada. We represent more
than 2100 investors who help Canadian entrepreneurs
in every region and industry to execute their vision and
compete on the global stage. Our members provide
companies with patient risk capital, expert advice and
professional networks when traditional financial and other
institutions cannot.
The role of Angel investors is critically important to
Canada’s economic prosperity. As the steward of Angel
research in Canada, we understand the importance
of collecting and disseminating information about our
investor community for our members and stakeholders
and the innovation community at large. Reports like
this help Angel investors and others to benchmark their
success against that of peers, learn best practices, and
recognize leaders within our community.
We are proud to share with you our fifth annual Report on
Angel Investing Activity in Canada. While this report only
captures the investment activity of a fraction of our more
than 2,100 members across the country, it helps to provide
us with a basis for understanding Canada’s Angel
community and our broader early stage ecosystem.
Working to encourage and support entrepreneurs as they
realize their vision for a prosperous future is part of the
DNA of the Angel investor. Over the last 5 years, this report
has captured over $270 million in 712 investments in 409
companies. We are encouraged by the results of this year’s
report, which show that Angel investment continues to
grow and become more connected. Working together,
these individuals and groups are supporting the
entrepreneurs who continue to form the backbone of our
future economic prosperity.
It is our mission to professionalize Angel investment in
Canada, giving Angel investors the tools, resources and
networks to develop a robust investment community.
We hope this report will contribute to that goal by providing
Canadian Angel investors with a better view of the positive
impact of their activities and the knowledge they need to
reduce risk and improve investee company success.
Finally, I would like to acknowledge the efforts of all of
those who contributed to this year’s report, including the
members of the project steering committee, our partners
who have supported this initiative, and the Angel group
managers who have taken the time to share their data
with us. Without their collaboration and investment, this
initiative would not be possible.
We hope you enjoy learning more about our community
and look forward to having you join us as we work to
harness the power of Canada’s Angel investing asset-class
in 2015.
Yours truly,
Harnessing the Power of Angel Investing
Michelle Scarborough
Chair
NACO Board of Directors

This 2014 Report on Angel Investing Activity in Canada
identifies key statistics and trends in the visible Canadian
Angel capital market as measured by the activity of Angel
groups. This report was compiled from an analysis of the
data on Angel group operating statistics and Angel
investments that NACO collected from Canadian Angel
group managers through surveys and follow-up interviews.
This year’s report includes a special section that presents
an economic profile of Angel-backed firms, which is the
product of a collaborative effort by Industry Canada,
Statistics Canada, and NACO. The results presented in
this section were compiled from the Reports on Angel
Investing Activity in Canada survey data and from Statistics
Canada administrative databases. It is hoped that as the
volume of collected data increases over the next few years,
a sufficiently robust longitudinal database of Angel
investments can be created that will enable an econometric
analysis of the economic performance and impact of the
population of Canadian Angel-backed firms.
Economic Profile of Angel-Backed Firms
Industry Canada created a longitudinal dataset of 110
Angel-backed firms by linking data from NACO’s Canadian
Angel Group Surveys of 2010, 2011 and 2012 to Statistics
Canada administrative databases. An analysis of the
sample showed that in the year that they first reported an
Angel investment, most Angel-backed firms performed
R&D, posted high levels of R&D intensity, had negative
net income, paid high wages, and were small in terms of
both revenue and employment.
The 2012 performance of the surviving Angel-backed firms
was subsequently compared to firms in three comparison
groups from the general population of Canadian small
firms: small manufacturing firms; small professional,
technical and scientific services firms; and small R&D
active firms. It is important to note that Angel-backed
firms in this analysis were young, with most of them having
received their first round of financing in 2010, 2011 or 2012.
Of the Angel-backed firms in the sample, 60% were R&D
active in 2012 while this was true for less than 8% of the
manufacturing and the professional, technical and scientific
services firms. It was also found that Angel-backed firms
tended to be highly R&D intensive and expectedly
unprofitable given their young age and R&D intensity. They
employed highly qualified professionals as reflected by
the high average wages they paid, even when compared
with R&D active firms among the three comparison groups.
Activity Overview
The Angel group data set provides a reliable picture of the
characteristics and activity of the visible Angel capital
market1
in Canada. The 2014 Angel Group Survey was
completed by 30 Angel groups. These 30 Angel groups
reported 237 investments and 217 deals in 181 companies
in 2014, for a total amount of $90.5 million.
The year 2014 saw a 2% increase in funding and a 17%
increase in the number of investments. Deal size increased
as well and two more exits were reported than in 2013.
There was a big shift in the composition of investments in
2014. New investments increased by 66%, while follow-on
investments decreased by 37%. A higher share of
investment went to new companies in 2014 as opposed
to existing portfolio companies, which represents a reversal
of the trend observed in 2013.
Angel group investment activity remained concentrated
in Central Canada. Of the $90.5 million reported Angel
investments, 89% were made in Central Canada, 10% in
Western Canada, and 1% in Eastern Canada. Angel groups
invested substantially larger amounts in Central Canada
than elsewhere. In terms of numbers of investments, 70%
were in Central Canada, 28% in Western Canada, and 2%
in Eastern Canada.
Angel Groups
Canadian Angel groups represented over 1,700 Angel
investors, of whom 30% were in Western Canada, 63% in
Central Canada, and 7% in Eastern Canada. Membership
numbers declined compared to the 2013 figure of 2,100
Angels. Applications for funding by companies also
declined. However, the average number of investments
Executive Summary
5 | 2014 Report on Angel Investing Activity in Canada
1
For the purposes of the report, the visible Angel market consists of the Angel groups known to NACO. This report captures the majority of the visible Angel
capital market in Canada, but not all. In Canada, as in the US and elsewhere in the world, Angel investment activity in the visible Angel market is overshadowed
by the investments placed by private individuals outside of Angel groups, which are impossible to track.

per group increased, and a bigger percentage of group
members invested in 2014 compared to 2013.
There was ample diversity among Angel groups in terms
of their size, activity level, geographic focus, cost of
membership, funding model, services provided to members,
and the degree of professionalization. Approximately 60%
of the groups were structured as not-for-profit organizations,
7% were for-profit, 20% were informal clubs/networks,
while 10% were branches of larger legal entities. Except
for a few, most Angel groups noted that they would
consider investment opportunities in Information and
Communications Technology (ICT) and Life Sciences, the
top two recipient sectors of Angel capital. Overall, Angel
groups had a broad industry focus.
Some groups were very selective and invited only a small
percentage of their applicant firms to present to investors.
Other groups invited almost all applicant firms to present
to the group members. The more selective groups funded
a larger percentage of the firms that were invited to present
to investors.
Investments
Over 80% of Angel funding was concentrated in two
sectors: ICT and Life Sciences, with about equal shares.
Clean Tech found itself in a distant third place with 3% of
the funding. ICT investments tended to be much smaller
than those in Life Sciences however, ICT attracted a
higher number of investments (55%) than the Life Sciences
sector (22%).
The bulk of the investments by Angel groups were made
in the city or province where they were located and the
median investment amount per Angel group was $160,000.
Angel groups in Central Canada made the largest
investments (median of $200,000), followed by groups
in Eastern Canada (median of $134,000) and Western
Canada (median of $100,000). The median investment
amount in an ICT or a Clean Tech company was $125,000,
compared to a median amount of $250,000 invested in
a Life Sciences company.
Co-investments (joint investments with Angels in the
same group) occurred in 65% of the investments, with
the most common co-investment scenario occurring
between just two partners. Syndication (Angel investment
with investors from outside of the group) occurred in 75%
of the deals. Of the deals for which the syndication
partner was known, 53% were syndicated with Angel
investors from outside of the group, 15% with venture
capitalists (VCs), 12% with a government partner, and
16% with another financier. Only 8% of the investments
had multiple types of syndication partners.
The median deal size was $883,000, substantially higher
than its 2013 figure of $500,000. At $723,000, the median
deal size in ICT was about half that of Life Sciences
($1,405,000). Three somewhat surprising findings on
deal size were that: (i) deal size for follow-on investments
was about the same as for new investments; (ii) the same
was true for the deal sizes of pre- and post-revenue firms,
and (iii) deal sizes were not larger for syndicated deals.
Valuations and exits
The number of reported exits in 2014 remains low, and
about the same as those reported in 2013. Angel groups
reported 10 positive exits (from nine companies), of which
eight were M&As and one was an IPO. The survey
respondents reported that three Angel-backed companies
went out of business.
The median and average (pre-money) valuations in 2014
were $4.0 million and $5.6 million, respectively. They were
not as high as in 2013 when the median and average
valuations were $5.0 million and $6.1 million, respectively.
Median valuations were about the same across sectors.
Follow-on investments tended to be associated with
higher company valuations.
2014 Report on Angel Investing Activity in Canada | 6

1 | Introduction
2
As defined by the National Instrument 45-106. According to a publication of the Ontario Securities Commission in 2012 (OSC Exempt Market Review: OSC
Staff Consultation Report Paper 45-710, Considerations for New Capital Raising Prospectus Exemptions. Toronto: OSC) there are between 391 and 857
thousand people in Canada who potentially meet the accredited investor criteria.
3
For example, we asked whether Angel groups collect any demographic information on their membership.
4
Comparisons based on amounts/volumes in this report are based on the subsample of 26 Angel groups. With our sample we trust we capture the visible
Angel capital market in Canada well. It has to be kept in mind that statements in this report do not necessarily reflect trends in broader Canadian Angel
capital market as research shows that large numbers of Angel investors operate outside the realm of Angel groups.
Angel investors play a crucial role in the Canadian
entrepreneurship ecosystem. They often fund companies
at the critical, early stage of firm development, and offer
other valuable input, such as mentorship, access to
networks, and expertise. Angel investors can search for
business opportunities by joining Angel groups, which
are membership forums of accredited investors2
who meet
regularly to review investment opportunities. For companies,
Angel groups offer a number of advantages. One is simply
the fact that they are visible. Instead of a time-consuming
search for Angel investors, companies can submit an
application for funding directly to an Angel group.
The 2014 Report on Angel Investing Activity in Canada is
based on the fifth Canadian Angel Group Survey that has
been conducted by the National Angel Capital Organization
(NACO). Its goal is to identify key statistics and trends in the
Angel capital market in Canada. Since 2010, the report
has captured over $270 million in 712 investments in 409
companies. The report also includes a special section
that presents the economic profile of Angel-backed firms
from the 2010, 2011 and 2012 surveys. This was the result
of collaborative work between NACO, Industry Canada
and Statistics Canada.
The survey instrument used for this report can be found at
http://nacocanada.com/knowledge/research/Angel-ac-
tivity-reports/. It has been modelled after the instruments
used in earlier years. New questions have been added
to increase our understanding of the structure of Angel
groups, their application procedures, and investment
processes. New questions have also been added to
explore a possible future expansion of the scope of the
report.3
The survey questions are classified into three
categories:
• Questions on the characteristics of the Angel group,
• Questions on investments placed by Angel group
members, and
• Questions about any exits from past investments in
companies.
NACO invited 39 Angel groups with five or more members
to complete the online survey with nine of these groups
approached for the first time in 2014. The response rate
was 77%, with 30 groups completing the survey, including
four new respondents. Fortunately, 26 of the 27 groups
(96%) that participated last year participated again this
year (Table 1). A high response rate among last year’s
participants is very important as it makes comparison of
market volumes between last year and this year possible.4

Following the survey, all groups were asked to participate
in a follow up interview. The goal was to confirm the survey
information that was unclear, to address unanswered
questions, to collect additional information on reported
exits, and to enquire about best practices. Follow-up
interviews were conducted with 23 respondents.
Thirty Angel groups participated in the 2014 survey
(Table 1). In 2014, the 30 Angel group survey respondents
reported 237 investments and 214 deals for a total amount
of $90.5M. Twenty-six of the 30 groups participated both
this and last year. Based on this comparison sample of
26 Angel groups it is estimated that in 2014 the visible
Angel market grew by 2% in terms of dollars invested and
17% in terms of numbers of investments. The median
amount invested in a company was $145,000 and the
average $282,000.5
The report is structured as follows. Section 2 presents
Angel group characteristics, while Section 3 explains how
Angel groups select the companies they invest in. Section
4 presents the findings from our analysis of the investments
Angel groups made in 2014. This core section discusses
the number of deals and investment amounts of Angel
groups, details on co-investments and syndicated deals6
,
round size, and company valuations. Section 5 presents
the findings from the analysis of reported exits. Section 6
presents an economic profile of Angel-backed firms that
was by linking data from NACO’s Canadian Angel group
surveys of 2010, 2011 and 2012 with data from Statistics
Canada administrative databases. Section 7 presents
the best practices and challenges as reported by Angel
group managers. Section 8 provides conclusions and
Annex A includes a data dictionary and glossary.
5
Where applicable both medians and averages are reported in the report. Both the median and the average are indicators of what happens to a “typical”
observation. However, the median is a more robust statistic that is not influenced by several large or small observations, while the average is.
6
In the context of the report we speak of co-investment if multiple group members invest together in a company, and syndication in case one or multiple group
members invest alongside parties outside the Angel group – think of Angels, VCs, strategic investors, financial institutions, etc.
Table 1: The 2014 Angel Group Survey - Participant Overview
Angel Group Characteristics In 2013 and 2014 Sample
(n= 26)
New in 2014 Groups
(n=4)
Full Sample
(n=30)
Median Age (years) 6.0 1.5 6.0
Average Age (years) 7.3 1.5 6.3
Median Number of Members 46.5 40.0 41.0
Average Number of Members 56.0 62.5 55.1
Groups (n) that Made Investments in 2014 n=23 n=2 n=25
Investments (k) Made by Group Members in 2014 k=226 k=11 k=237
Median Number of Investments 6.0 2.0 6.0
Average Number of Investments 8.7 2.8 7.6
Median Dollars Invested (per Angel Group) $2,300 thousand $350 thousand $1,500 thousand
Average Dollars Invested (per Angel Group) $3,400 thousand $352 thousand $2,900 thousand
Groups (n) Reporting Company Investment
Information in 2014
n=21 n=0 n=21
Investments (k) and Deals (d) with Company
Information
k=203, d=183 k=0, d=0 k=203, d=183
Median Investment Amount $145 thousand n/a $145 thousand
Average Investment Amount $394 thousand $128 thousand $382 thousand
Total Investment Amount (All Groups) $89.1 million $1.4 million $90.5 million

2.1 Organizational Structure
2.2 Age
2.3 Size and Composition
2.4 Services offered, Funding and Level
of Activity
2.5 Trends
10
11
12
16
19

2.1 Organizational Structure
There are many ways in which Angel groups can organize
themselves. Sixty percent of Canadian Angel groups were
legally structured as not-for-profit organizations, while 20%
were informal clubs or networks, 10% were branches of
larger legal entities such as industry organizations or
universities, and 7% were structured as for-profit
corporations (Figure 1).
In follow-up interviews, it was revealed that the majority
of Angel groups operate as networks. Angel networks
invite selected applicant firms to make a pitch, but leave
the subsequent investment decisions to individual members
of the network. Of the 30 groups, there were as many
as 29 groups that operated as a network. There was at
least one group where the members were shareholders
of a fund, however, the group itself had no legal structure.
Figure 1: Corporate Legal Structure (n=30)
Not-For-Profit Corporation
Not Legally Structured
Other
60%
20%
10%
7%
3%
Not Legally Structured: Part of a Larger Legal Entity
For-Profit Corporation

NumberofGroups
7
6
5
4
3
2
1
0
Number of Years in Operation
Groups that participated in 2013 Groups New to 2014 Sample
Figure 2: Years in Operation (n=30)
1 2 3 4 5 6 7 8 9 10+
Years
2.2 Age
The Angel group/network is an established institution in the
early-stage investing ecosystem in Canada7
. The typical
Angel group is 6-7 years old (Figure 2). Twenty four of the
30 participating groups were at least 5 years old. The four
groups that were new to the survey were also new to the
market, with an average age of one and half years.
The typical Angel group is 6-7 years old.
Twenty four of the 30 participating groups
were at least 5 years old.
7
In computing the age, it is assumed, for convenience, that the age of a group that formed in year yyyy is 2015 – yyyy years. For example, a group founded
in 2014 is current 2015 – 2014 = 1 year old.

2.3 Size and Composition
The size of Angel groups could be measured by the number
of members: the number of active members (defined as
the members who are involved in at least one deal in the
past 12 months) the number of investments or the amount
invested.
Twenty-three groups had between 26 and 100 members
and, with a few exceptions, young groups were somewhat
smaller than established ones (Figure 3). Established groups
are defined as groups that are at least 6 years old.
Figure 3: Number of Group Members 2014 (n=30)
Number of Group Members
11 to 25 Over 10051 to 100
NumberofCompanies
12
10
8
6
4
2
0
Established Angel Groups
Young Angel Groups
New Survey Participants
26 to 501 to 10
Established groups are defined as groups that
are at least 6 years old.

Active Membership Total Membership
Total Group Members
Figure 4: Number of Active Angel Group Members (n=30)
TotalActiveMembersin2014
180
160
140
120
100
80
60
40
20
0
0 20 40 60 80 100 120 140 160 180
There is wide variation in the percentage of active
members in an Angel group (Figure 4). However, having
more members in a group is associated with somewhat
higher investment activity (Figure 5, Panel A). There is no
obvious link between geographic focus of groups and
the number of investments they make (Figure 5, Panel B).
In 2014, the number of Angel groups that did at least 5
investments recovered from the decline experienced in
2013 (Figure 6). This may suggest a broader recovery in
2014 of the Angel capital market which was in decline in
20138
.
8
The apparent growth of Angel groups with no deals is spurious and reflects the fact that two of the four new participants have not (yet) generated any deal flow.

Region Within a Province
Region Spanning Multiple Province/States
Do Not Invest Based on Geography
Province
Panel B: By Angel Group Regional Focus
25
20
15
10
5
0
Angel Group Size
NumberofInvestmentsMade
0 20 40 60 80 100 120 140 160 180
Canada
Unknown
Figure 5: Group Size and Number of Investments Made (n=30)
Panel A: By Angel Group Age
25
20
15
10
5
0
Angel Group Size
NumberofInvestmentsMade
Young Angel Groups
0 20 40 60 80 100 120 140 160 180

0
1-5
6-10
11-25 Investments
Figure 6: The Distribution of the Number of Investments
by Angel Groups: 2012-2014
Year
PercentageofAngelGroups
2013 (n=29)2012 (n=20) 2014 (n=30)
100%
80%
60%
40%
20%
0%
5%
45%
25%
25%
14%
52%
10%
24%
17%
30%
23%
30%
75%-100%
50%-75%
25%-50%
0-25%
Figure 7: Percentage of Angel Group Members with
Entrepreneurial Background
Year
PercentageofAngelGroups
2013 (n=26)2012 (n=20) 2014 (n=22)
100%
80%
60%
40%
20%
0%
5%
30%
25%
40%
4%
12%
35%
50%
14%
41%
45%
Angel capital is crucial for companies for more than just
the funding provided. Angels provide entrepreneurs with
advice, mentorship, and access to networks. This makes
the composition of Angel groups’ membership relevant.
NACO routinely collects information on the percentage of
members that have entrepreneurial experience.
Overall, in about 86% of Angel groups, more than 50% of
members had entrepreneurial experience. Most changes
over time are small, but the number of Angel groups in
which at least 50% of the members have entrepreneurial
experience has increased (Figure 7).
In about 86% of Angel groups, more than 50%
of members had entrepreneurial experience.

2.4 Services Offered, Funding and Level of Activity
Angel groups offer a variety of services to their members.
These go well beyond networking opportunities and
prospecting potential investment opportunities. Examples
include training opportunities; free or inexpensive access
to legal services; access to term sheet templates; advice
on valuation and how to structure deals; and assistance
with due diligence and negotiations with firms. From the
survey and the follow-up interviews it is clear that there
is a wide variation in the services that Angel groups offer.
The level of available administrative support differs
substantially from group to group (Table 2). For instance,
one group noted that it employs five full-time and five
part-time staff, while other groups reported relying purely
on volunteers from its members. There is also a substantial
variation in membership fees. Young groups tend to
charge smaller fees than established groups (Figure 8).
The link between the level of services offered by a group and
the level of the group’s investment activity was analyzed.
A group with several full-time staff members or high
membership fees is expected to offer better-quality services
than a group with a low number of staff members or low
membership fees. The amount invested per Angel group
was regressed on the available administrative support
and membership fees. The regression suggests there
is a positive relationship between these two variables.
Specifically, every full-time employee tends to add $1.1
million to the total invested by the group.
Seventeen Angel groups relied on sponsorships and 14
Angel groups benefited from government funding (Table 3).
Angel groups that received government funding often
received it from both federal and provincial levels of
government. It is clear that young Angel groups, including
the four new participants, were less likely to attract funding
from sponsorships or government.
Young Angel Groups
Membership Fee
Figure 8: 2014 Membership Fees of Angel Groups (n=28)
NumberofGroups
12
10
8
6
4
2
0
Free $501-750 $751-1000 $1001+$251-500$1-250
17 Angel groups relied on sponsorships and
14 Angel groups benefited from government
funding.

Table 2: Angel Group Size, Investment per Member and Employment (n=30)
Membership
Fee
Region of
the Angel
Group
Age of
the Angel
Group
Group
has a
Formal
Selection
Process
# of
Angel
Group
Members
# of
Investments
Made
Amount
Invested (in
thousands
of dollars)
Amount
Invested
per Member
(in thousands
of dollars)
# of
Full
Time
Staff
# of
Part
Time
Staff
Angel
Group
Negotiates
with
Firms for
Interested
Members
Free Western Young Yes 5 0 0 0 0 1 No
Free Western New No 154 0 0 0 0 0 No
Free Western New Yes 30 7 700 23 0 0 No
Free Central Young Yes 95 7 21,900 231 3 1 Yes
Free Central Young No 12 0 0 0 0 0 Yes
Free Central Young Yes 41 4 3,300 80 0 0 Yes
Free Central Young Yes 33 4 1,525 46 1 4 No
Free Central Young No 12 2 250 21 n.r. n.r. n.r.
Free Central New Yes 16 0 0 0 0 3 Yes
Free Central New Yes 50 4 709 14 3 2 Yes
Free Central Established No 78 3 2,330 30 0 1 No
Free Central Established Yes 78 7 4,223 54 1 0 No
Free Central Established Yes 68 25 8,610 127 1 1 No
$1-$250 Western Young Yes 40 4 440 11 0 1 No
$1-$250 Western Established Yes 65 13 3,600 55 1 2 No
$1-$250 Central Young No 33 12 5,615 170 0 0 No
$1-$250 Central Established Yes 52 6 4,517 87 1 0 No
$251-$500 Western Established Yes 56 15 561 10 0 0 No
$251-$500 Eastern Established Yes 22 0 0 0 0 2 No
$501-$750 Central Established Yes 16 6 779 49 1 2 No
$751-$1000 Western Established Yes 127 24 2,795 22 0 8 No
$751-$1000 Western Established Yes 29 4 880 30 1 4 No
$751-$1000 Eastern Established Yes 85 3 602 7 3 0 Yes
$751-$1000 Central Young Yes 95 17 4,142 44 2 2 No
$751-$1000 Central Established No 22 1 205 9 0 2 No
$1001+ Central Established Yes 165 22 11,403 69 5 5 No
n.r. means the observation was not reported.

Angel Group Operational Funding Sources
Membership
Fee
Region
of the
Angel
Group
Age of
the Angel
Group
# of
Angel
Group
Members
Sponsorships Funding
Received
from a
Separate
Parent
Entity
Provincial
Gov’t
Funding
Federal
Gov’t
Funding
Revenue
Generated
from
Investments
Made
Revenue
Generated
from
Events
One or
More
Members'
Personal
Funds
Free Western Young 5
Free Western New 154
Free Western New 30
Free Central Young 95
Free Central New 16
Free Central New 50
Free Central Established 78
$1-$250 Western Young 40
$1-$250 Western Established 65
$1-$250 Central Young 33
$1-$250 Central Established 52
$251-$500 Eastern Established 22
$751-$1000 Eastern Established 85
$751-$1000 Central Young 95
$1001+ Central Established 165
Total 17 3 14 14 4 5 4
Table 3: Angel Group Sources of Revenue

Table 4: Recent Developments to Angel Groups (n=26)
Location Age Members Active
Members
Applications Presentations Number of
Investments
Value of
Investments
Western Established 30% -48% n.r. -5% -13% 12%
Western Established -86% -80% -94% -7% -20% -57%
Western Established -74% 3% -5% 35% 9% -75%
Western Established -32% n.r. -30% -40% 200% 300%
Western Young -17% 0% 0% 0% 0% n.r.
Western Young 0% 33% 11% -33% 0% -23%
Central Established 18% -5% 19% 2% 29% 65%
Central Established 32% 0% 5% 39% 29% -58%
Central Established -16% -39% -76% -27% 100% -6%
Central Established -4% n.r. -37% 0% -17% 50%
Central Established 57% 150% -11% -17% 50% 10%
Central Established 24% n.r. 850% n.r. n.r. n.r.
Central Established 33% 825% -4% -20% 50% 882%
Central Established -38% 5% 107% 3% 25% -40%
Central Established 10% n.r. -25% 0% n.r. n.r.
Central Established 26% 33% -56% 11% 75% 438%
Central Established -51% -76% -8% 13% 60% 48%
Central Young -12% -3% -34% 33% -15% -28%
Central Young 0% n.r. -30% n.r. -33% -95%
Central Young -65% -11% -33% 1150% 40% 71%
Central Young 83% 83% 20% 100% 33% 129%
Central Young 37% 78% -38% -33% -43% -55%
Central Young 0% n.r. n.r. n.r. -100% -100%
Central Young 313% 317% 11% n.r. 100% 294%
Eastern Established 6% 43% -35% 0% -25% -15%
Eastern Established -12% n.r. -52% 100% 0% n.r.
# change +10% or more 10 8 6 8 12 10
# -10% < change < +10% 6 6 5 8 4 2
# change -10% or less 10 5 13 6 8 10
Canada -31% 10% -17% 1% 17% 2%
n.r. means the observation was not reported.
2.5 Trends
A year-over-year comparison is best done by focusing
on the 26 groups that participated in the survey both in
2013 and in 2014 (Table 1). Overall, membership numbers
declined by 31%. However, the number of active members
increased by 10%, the number of investments increased
by 17%, and the amount invested increased by 2%.
The number of applications for funding declined by
17%, yet there were about the same number of investor
pitches. The statistics for individual groups vary and
there are always several groups that move against the
general trend. For example, despite the overall decline
in membership numbers, 9 of the 26 groups saw their
membership numbers increase (Table 4).

3.1 Geographical and Sector Focus
3.2 Applications, Presentations, and
Funding
21
23

3.1 Geographical and Sector Focus
Most groups indicated that they have a geographic
focus (Figure 9). No group reported that it focused on a
single city. But the geographic focus of half the groups
was still either a region within the group’s province (30%)
or the entire province (20%). Other groups indicated that
their focus spanned multiple provinces or states (17%),
Canada (10%); or that they had no geographic focus (20%).
Figure 9: Angel Group Geographical Focus (n=30)
Region Within a Province
Region Spanning Multiple Province/States
Do Not Invest Based on Geography
Province
Canada
Unknown
20%
30%
3%
17%
10%
20%

Table 5: Sector Focus of the Angel Groups (n=29)
Region of
the Angel
Group
Age of the
Angel Group
Sector
Focus
Life
Sciences
ICT Clean Tech Manufacturing Services Energy Other
Western New No
Western New Yes
Western Established No
Western Young No
Western Young Yes
Central New No
Central New Yes
Central Established No
Central Established Yes
Central Young Yes
Central Young Yes
Total 14 27 27 23 22 16 19 15
Fourteen of the 30 groups (47%) reported having a sector
focus (Table 5). Despite this, the bulk of Angel groups,
including those that reported having a sector focus, were
open to investments in multiple industries. Seven of the
30 Angel groups (24%) had a narrower focus on three or
fewer industry sectors. In 2013, as many as 13 (48%) of
the 27 Angel groups reported that their group focused on
three or fewer industries. Angel groups seemed to have
widened their reach. In their majority, Angel groups were
open to opportunities in Life Sciences, ICT, Clean Tech,
and Manufacturing; and a little over half of the groups
would consider investing in Services, Energy and “Other”
industries. Angel groups in the more “crowded market”
of Central Canada, were more likely to have a sector focus,
which is particularly true for young groups.
The bulk of Angel groups were open to
investments in multiple industries.

3.2 Applications, Presentations, and Funding
In 2014, 30 Angel groups received 2,972 applications.
Twenty four of those groups scheduled 695 company
presentations to the group members and 25 groups made
237 deals (Figure 10).
3.2. Applications, Presentations, and Funding
Based on data provided by 22 groups, presentation rates,
funding rates and application success rates were analyzed.
Presentation rate is defined as the ratio of presentations
and total number of applications. Funding rate is defined
as the percentage of presentations that resulted in a deal.
Finally, the application success rate is defined as the
percentage of applications that resulted in a deal.
30 Angel groups received 2,972 applications
leading to 25 groups funding 237 deals.
2972
695*
271
237
Figure 10: Funding Success Funnel (n=30)
* Based on 24 of the 30 groups that reported the number of presentations held
Applications
Due Diligence
Presentations
Funded

Figure 11: Company Selection by Angel Group (n=22)
Angel Group
RatePercentage
100%
80%
60%
40%
20%
0%
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
Presentation Rate (# Presentations / # Applications)
Funding Rate (# Funded / # Presentations)
Application Success Rate (# Funded / # Applications)
Presentation rates differed substantially among groups,
with some groups reporting 100% presentation rates.
These groups do not appear to carry out any screening
on behalf of their members. Other groups appeared to
be highly selective, only allowing a small percentage of
applicants to present to their group members (Figure 11).

There is also notable variation among groups in terms of
funding rates and application success rates. The more
selective groups tended to report high funding rates, while
the less selective groups tended to report low funding
rates. A negative relationship appears to exist between
the presentation rate and the funding rate (Figure 12). A
similar pattern was observed in 2013.
Company presentations at selective Angel groups more
often resulted in an investment. Clearly, the selection
processes implemented at some of the more selective
groups resulted in higher quality presentations and could
be deemed a valuable service for the groups’ membership.
Figure 12: Group Investments and Presentation Rate
Presentation Rates of Canadian Angel Groups
TotalDollarsInvested(millionsof$)
TotalInvestments
$50
$40
$30
$20
$10
$-
120
100
80
60
40
20
0
Total Dollars Invested Total Investments
1-20% 61-80% 81-100%41-60%21-40%0%

4.1 Overview
4.2 Breakdown by Number of Investments
4.3 Breakdown of Amount of Investment
4.4 Deal Structure
4.5 Investment Amounts
4.6 Co-Investment Activity
4.7 Syndication
4.8 Deal Size
4.9 Valuations
4.10 Comparison with the US Angel
Capital Market
4.11 Distance from the Angel Group
4.12 Stage of Development
4.13 Company Size
4.14 Assistance through Government
Programs
27
29
33
36
38
39
41
43
45
47
49
50
50
51

4.1 Overview
The total amount of Angel investment captured by the
surveys increased from $40.5 million in 2012 to $88.7
million in 2013 to $90.5 million in 2014 (Figure 13). This is
due in part to an increase in the number of respondents.
To estimate the growth of the visible Angel capital market,
the comparison sample was introduced in the 2013 report.
It was argued that this comparison sample produced a
reasonable estimate of the growth of the visible Angel
market. In 2013, the comparison sample consisted of
17 groups that participated in both the 2012 and the
2013 survey. It was concluded that, between 2012 and
2013, the visible Angel capital market in Canada had
contracted by 13%.
Figure 13: Amounts of Investments: 2012-2014
New
Follow-on
Unspecified
InvestmentAmount(millionsof$)
$90
$80
$70
$60
$50
$40
$30
$20
$10
$-
Year
2013
(n=25, k=199)
2014
(n=25, k=237)
2012
(n=19, k=139)
7.3
4.3
28.9
28.8
61.7
45.6
5.7
37.4

In 2014, the comparison sample consisted of 26 groups
that participated in the survey in both 2013 and 2014
(Table 1). The growth rate of the visible Angel capital market
in 2014, based on the comparison sample (Figure 14),
was 2%9
.
Furthermore, the amount invested in follow-on investments
grew between 2012 and 2013 but shrank between 2013
and 2014. Conversely, new investments declined between
2012 and 2013 but increased between 2013 and 2014
(Figure 14).
New
Follow-on
Total
Figure 14: Growth of the Visible Angel Capital Market in Canada
GroowthRate
66%
2%
-47%
168%
-13% -37%
2013
(n=17)
2014
(n=26)
The visible Angel capital market grew 2%
in 2014.
9
Not shown in the figure is that numbers of investments, which increased by as much as 17% (see Table 4).

4.2 Breakdown by Number of Investments
The median and average number of investments per Angel
group in 2014 were 6.0 and 7.6, respectively (Table 1).
The figures for 2013 were 5.0 and 6.9, respectively. The
number of investments was not collected prior to 2013.
Based on 198 investments for which industry information
is available, more than half of the investments in 2014 were
made in ICT companies, and about a fifth in Life Sciences
companies (Figure 15). “Other” sectors attracted 10% of
the deals, followed by manufacturing with 7% and Clean
Tech with 5%.
A quarter of the 237 investments in 2014 were follow-on
(beyond first-time, even if by different investors in the
Angel group), clearly lower than their 33% share in 2013
(Figure 16). New investments (defined as the first time any
of the Angel group members invests in the company)
represented 75% of the total (Figure 16).
Of 237 investments, 25% were follow-on and
75% were new.
Figure 15: Percentage of Investments: Total Number of
Investment by Sector: 2012-2014
Life Sciences
Services
Manufacturing
Clean Tech
Energy
ICT
Other
Year
PercentageofInvestments
2013 (k=134)2012 (k=110) 2014 (k=198)
100%
80%
60%
40%
20%
0%
7%
53%
18%
22%
3%
59%
24%
12%
5%
55%
22%
7%0%
10%
0%
Figure 16: Number of Investments: 2012-2014
New
Follow-on
Unknown
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Year
2013
(n=25, k=199)
2014
(n=25, k=237)
2012
(n=19, k=139)
22%
5%
73%
33%
2%
65%
25%
75%

Like last year, most investments were made in Central
Canada, but Western Canada (BC, AB, SK) had a vibrant
local Angel capital market as well (Figure 17, Panel A),
considering its smaller population compared to Central
Canada (Figure 17, Panel B). Groups in Central Canada
participated in more follow-on investments (28%) than
Angel groups in the West (18%), a pattern observed in
2013 as well.
New Follow-on
Figure 17:
Panel A: Number of Investments by Region (n=30)
Central Canada
(70% of
Investments)
Eastern Canada
(2% of
Investments)
180
160
140
120
100
80
60
40
20
0
Western Canada
(28% of
Investments)
NumberofInvestments
18%
82%
33%
67%
28%
72%
New Follow-on
Panel B: Number of Investments per Million of People (n=30)
Central Canada
(70% of
Investments)
Eastern Canada
(2% of
Investments)
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
Western Canada
(28% of
Investments)
NumberofInvestments
18%
82%
33%
67%
28%
72%
Most investments were made in Central
Canada, but Western Canada had a vibrant
local Angel capital market as well.

Top 5 Young Canadian Angel Groups by Number of
Investments in 2014
XDL Capital Group
Ontario
Mistral Venture Partners
Ontario
iGan Partners
Ontario
Omega Star
Ontario
Saskatchewan Capital Network
Saskatchewan
Angel One Investor Network
Ontario
2013 Rank
N/A
N/A
N/A
N/A
N/A
N/A
4
4
1
4
3
2
1
Top 5 Canadian Angel Groups by Number of
Investments Made Made in 2014
VA Angels
Alberta
Capital Angel Network
Ontario
Northern Ontario Angels
Ontario
2013 Rank
4
New
4
1
1
Anges Québec
Quebec
Ontario5
1
4
3
2
1

Figure 18: Investments and Membership by Region in 2014
= 5% of Membership Distribution
Number of Investments Made in 2014
Value of Investments Made in 2014
Western Canada
Central Canada
Eastern Canada
506 Investors
$9.0 million in 67 investments
28% 10%
70% 89%
2% 1%
1,094 Investors
107 Investors

They were:
1. Information and Communication Technology (ICT)
2. Life Sciences
3. Clean Technology
Thirty-two percent of all investment amounts went to
follow-on investments, and 68% were in new investments
(Figure 20). The amount invested in follow-on investments
grew substantially between 2012 and 2013, but shrunk
between 2013 and 2014. The reverse trend was observed
for the amount invested in new investments.
4.3 Breakdown of Amount of Investment
Life Sciences and ICT attracted 83% of the total amount
invested by Angel investors in 2014 (Figure 19). There is a
major difference between the number of investments and
amounts invested. Despite a higher number of investments
in the ICT industry than in the Life Sciences industry, both
sectors received similar investment amounts. The average
investment size was greater for Life Sciences. In the visible
Angel market, the top three sectors in 2014 in terms of
total Angel investment amounts remained unchanged.
Life Sciences and ICT attracted 83% of the
total amount invested by Angel investors in
2014.
Figure 19: Percentage of Investments: Total Amount of
Investments by Sector: 2012-2014
Life Sciences
Services
Manufacturing
Clean Tech
Energy
ICT
Other
50%
21%
8%
45%
33%
7%
13%
42%
41%
3%
Year
2013 (k=134)2012 (k=110) 2014 (k=197)
100%
80%
60%
40%
20%
0%
21% 10%
Figure 20: New/Follow-on Composition of Investments by
Investment Amount, 2012-2014
18%
11%
71%
51%
6%
42%
32%
0%
68%
New
Follow-on
Unspecified
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Year
2013
(n=25, k=199)
2014
(n=25, k=237)
2012
(n=19, k=139)

Figure 21:
Panel A: Investment Amount by Region (n=30)
$90
$80
$70
$60
$50
$40
$30
$20
$10
$-
Region
Central Canada
(89% of
$ Invested)
Eastern Canada
(1% of
$ Invested)
Western Canada
(10% of
$ Invested)
9%
91% 7%
93%
35%
65%
Central Canada was dominant in terms of investment
amounts (Figure 21, Panel A). Furthermore, investment
size in Central Canada was larger than elsewhere in
Canada with Central Canada Angel groups investing
more in follow-on investments than elsewhere in Canada.
Per capita investment amounts in Central Canada are
also at least four times as high as elsewhere in Canada
(Figure 21, Panel B).
New Follow-on New Follow-on
Panel B: Investment Amount per Millions of People (n=30)
9%
91%
7%
93%
35%
65%
$4.0
$3.5
$3.0
$2.5
$2.0
$1.5
$1.0
$0.5
$-
Region
Central Canada
(89% of
$ Invested)
Eastern Canada
(1% of
$ Invested)
Western Canada
(10% of
$ Invested)

Top 5 Canadian Angel Groups by Dollar Amount
Invested in 2014
Golden Triangle Angel Network
Ontario
Anges Québec
Quebec
XDL Capital Group
Ontario
Northern Ontario Angels
Ontario
iGan Partners
Ontario
2013 Rank
New
5
New
1
2
5
1
4
3
2
1
Top 5 Young Canadian Angel Groups by Dollar
Amount Invested in 2014
2013 Rank
N/A
N/A
N/A
N/A
N/A
XDL Capital Group
Ontario
Omega Star
Ontario
Ontario
Mistral Venture Partners
Ontario
iGan Partners
Ontario
5
1
4
3
2
1

4.4 Deal Structure
Information on the financial instruments used by Angel
investors was reported by 14 Angel groups for 100
investments. The most commonly used financial
instruments were common shares (44%), preferred shares
(35%), and convertible debentures (11%) (Figure 22).
The data show that most groups worked with one or two
different instruments.
4%1%
44%
5% 11%
35%
Figure 22: Deal Structure (n=14, k=100)
Common Shares
Other
Loan (Debt)
Preferred Shares
Multiple Securities
Convertible Debenture
The most commonly used financial instruments
were common shares (44%), preferred shares
(35%), and convertible debentures (11%).

4.5 Investment Amounts
The median amount invested was $160,000, while the
average was more than twice as large ($384,000) (Figure
23). The regional breakdown in 2014 shows that Central
Canada-based Angel groups made the largest
4.5. Investment Amounts
investments in companies. Across Canada in 2014,
the median investment amount had decreased by 23%
between 2013 and 2014, from $209,000 to $160,000
(Figure 23).
(k=9) (k=98)(k=20)
Western Canada Central Canada Eastern Canada Canada
(k=135)(k=43) (k=164) (k=3) (k=4) (k=3) (k=110) (k=159)(k=210)
600
500
400
300
200
100
0
Region
383
137
175
209
160135 134
175 175
215 200
100
MedianAmount(thousandsof$)
Figure 23: Investment Amounts by Region: 2012-2014
Panel A: Angel Group Medians (per Investment)
2012 2013 2014
2012 2013 2014
(k=24) (k=112)(k=60)
Western Canada Central Canada Eastern Canada Canada
(k=135)(k=66) (k=167) (k=3) (k=4) (k=3) (k=139) (k=199)(k=236)
600
500
400
300
200
100
0
Region
283
223
292
446
384
176
201
305 298
516 485
136
AverageAmount(thousandsof$)
Panel B: Angel Group Averages (per Investment)

Figure 24: Investment Amounts by Industry Sector: 2012-2014
Panel A: Angel Group Medians (per Investment)
2012 2013 2014
MedianAmount(thousandsof$)
(k=57, 78, 108) (k=103, 32, 43) (k=8, 5, 9) (k=18, 19, 37)
ICT Life Sciences Clean Tech Other
700
600
500
400
300
200
100
0
Industry Sector
238 250 244
118 125
250 240
573
125
180
125
250
2012 2013 2014
Panel B: Angel Group Averages (per Investment)
AverageAmount(thousandsof$)
Industry Sector
(k=58, 78, 108)
ICT Life Sciences Clean Tech Other
(k=103, 32, 43) (k=8, 5, 9) (k=18, 19, 37)
368
306 326
642
348
810 1587
385
257
302
271
323
700
600
500
400
300
200
100
0
The median investment amount in the Life Sciences
was the largest at $250,000 in 2014 due to few large
investments. It was twice as large as in ICT and Clean
Tech (Figure 24).
The median investment amount in ICT has been
decreasing since 2012, while the average has stayed
approximately the same. However, the median invest-
ment amount in the Life Sciences has been flat, while
the average has increased substantially in the last three
years.

4.6 Co-Investment Activity
In this report, co-investment refers to the scenario when
multiple investors from the same Angel group participate
in the same investment. Co-investment information
gathered has traditionally been satisfactory and in 2014,
it was available for 136 investments. Co-investment
happened in 65 percent of these investments (Figure 25).
Thirty five percent of investments involve only one investor.
11-20
21+
1
2
3
4
5
6-10
Figure 25: Number of Angel Group Members Involved in
the Same Deal
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Year
2013
(k=128)
2014
(k=136)
2012
(k=93)
17%
6%
11%
6%
20%
16%
33%
12%
9%
8%
5%
9%
13%
4%
40%
21%
8%
7%
2%
5%
18%
4%
35%
1%
35% percent of investments involve only one
investor. The most common co-investment
situation is co-investment with just one other
group member (21%).

Number of Co-investors
Figure 26: Co-investment Group Size and Angel Group Investment Amount (k=136)
AmountInvested(millionsof$)
$3.5
$3
$2.5
$2
$1.5
$1
$0.5
$-
1 3 4 5 6-10 11-20 21+2
The most common co-investment situation is co-investment
with just one other group member (21%). Yet, there is
plenty of variation. For example, in 9% of the investments
over 10 members co-invest.
While there are plenty of exceptions, the rule seems to
be that having a greater number of co-investors makes
for greater investment amounts (Figure 26).

Figure 27: Types of Syndication Partners in 2014
Angel Capital
Angels & Government
Government & Banks
Government
Angels, VCs & Strategic Partners
Angels & VCs
Other
VC
Not Syndicated (k=40)
Syndicated, Partner(s) Known (k=83)
Syndicated, Partner(s) Unknown (k=37)
49%
1%1%
2%
4%
16%
12%
15%
4.7 Syndication
In this report, syndication refers to when Angel group
members invest together with outside parties. Angel groups
reported syndication information for 160 of the 237
investments, and indicated that 120 of these 160 deals
(75%) involve syndication. For 37 of the 120 syndicated
deals, the syndication partner was unknown (Figure 27).
For the remaining 83 deals, Angel groups had a variety
ication
of syndication partners, with about half (49%) of the deals
involving syndication with outside Angel groups, 15%
involving VCs, 12% involving Government, and another
16% involving “Other” syndication partners. Syndication
with multiple parties outside the Angel group took place
in 8% of the investments.10
10
Comparing the 2013 and the 2014 syndication results is not straightforward for two reasons. First, the questions as well as the set of available answers
were changed in the 2014 survey. Secondly, the identity of the syndication partners was known in only 38 of the 199 (19%) of the transactions in 2013. Yet,
taking these 38 answers at face value, and comparing with the 2014 data would show that syndications with Angels outside the group as well with VCs
were both more common in 2013 than in 2014.
75% of deals involve syndication. Angel groups had a variety of syndication
partners, with about half (49%) of the deals
involving syndication with other Angels.

In 2014, the median amount contributed by syndication
partners was $500,000, up from $415,000 in 2013, but on
par with the 2012 figure (Figure 28). The average investment
by syndication partners almost doubled during 2012-2014.
This implies that while syndication might not play a larger
role in a typical (median) investment, its importance might
have increased for a few large deals.
Year
Figure 28: Investment by Syndication Partners 2012-2014
500
DealSize(thousandsof$)
1200
1000
800
600
400
200
0
2013
(k=76)
2014
(k=104)
2012
(k=57)
553 1,062
415
825
789500
Median Average

4.8 Deal Size
For the 217 deals reported in 2014, information on deal
size was available for 144 deals. The median deal size has
somewhat recovered from its sharp drop in 2013. At about
$1.2 million, the average deal size was substantially larger
than in 2012 and 2013 (Figure 29).
For syndicated deals, the median and average deal sizes in
2014 were about $883,000 and $1,492,000, respectively
(Table 6), masking a wide variation between a minimum of
$33,000 and a maximum of $10 million. Median and
average deal sizes associated with follow-on investments
were not larger than deal sizes associated with new
investments. Deal sizes in Life Sciences (Median=1.4 million,
Average = 2.2 million) were twice as large as those in ICT
(Median=0.7 million, Average = 1.1 million), while deal
sizes for pre-revenue companies and post-revenue
companies were about the same.
Deal sizes depend on the type of syndication partner
(Figure 30). Syndications with other Angel capital (i.e.
other Angel groups, Angel funds, or individual Angels
outside the group) can lead to quite substantial rounds.
The median deal size of $1.0 million for deals syndicated
with other Angel capital is only slightly below the median
deal size when Angels syndicate with VCs. Syndications
with a Government party are associated with smaller
deals (Median=$0.4 million).
Year
Figure 29: Deal Sizes: 2012-2014
500
1400
1200
1000
800
600
400
200
0
2013
(k=104)
2014
(k=144)
2012
(k=57)
825
919
945
Median Average
1229
698
At about $1.2 million, the average deal size was
substantially larger than in 2012 and 2013.
Deal sizes in Life Sciences were twice as large
as those in ICT.

1000
Median
Figure 30: Deal Sizes for Syndicated Investments in 2014
2000
1800
1600
1400
1200
1000
800
600
400
200
0
Unknown
(k=36)
VC
(k=13)
Other
Angel
Capital
(k=30)
Government
(k=15)
Non-Angels
(k=39)
Others
(k=13)
Total
Syndicated
(k=104)
1492
1188
425
815
1373
1670
756 756748
1808
1045
1655
883
Average
Table 6: Deal Size Statistics (thousands of $)
Categories Sample Size Median Average Minimum Maximum
All Investments k=144 698 1229 15 10400
Syndicated k=104 883 1492 33 10400
Non-syndicated k=40 220 547 15 3500
New k=105 695 1208 15 10400
Follow-on k=39 725 1285 30 6000
ICT k=70 650 1041 15 9914
Life Sciences k=35 1400 2002 50 7500
CleanTech k=7 125 346 100 1042
Other k=31 500 1021 25 10400
Unknown k=1 50 50 50 50
Pre-Revenue Companies k=40 804 1550 30 7500
Post-Revenue Companies k=46 870 1098 40 4950
Unknown k=58 441 1112 15 10400
0-5 Employees k=44 530 1010 30 5000
6-10 Employees k=22 853 1203 50 4000
11+ Employees k=30 1478 1894 160 75000
Unknown k=48 313 1027 15 10400

4.9 Valuations
Collecting company valuations continues to be a challenge.
Angel group managers reported company valuations for
56 of the 217 deals. The median and average valuations
in 2014 were $4.0 million and $5.6 million, respectively
(Figure 31, Panel A). Compared to valuations reported for
the United States in the Halo report, Canadian valuations
were somewhat higher. Yet they were not as high as in
2013 when the median valuation was $5.0 million and the
average was $6.1 million.
4.9. Valuations
Follow-on investments tended to be associated with higher
valuations (Figure 31, Panel B). The median valuation was
$4 million for new investments and approximately $5.9
million for follow-on investments. Last year, almost all
valuations that were below $2 million involved new
investments. With five follow-on investments of $2 million
or less, this is certainly not the case in 2014.
The high valuations in Canada were not due to a “Life
Sciences sector effect” (Figure 31, Panel C). The data
show that the average valuation in Life Sciences is higher
(because of the relatively many deals in the $10M+ range),
but also shows that median valuations were $4 million for
both ICT and Life Sciences. A possible explanation for
the higher valuation in Canada could be selection bias.
Survey respondents only knew valuations for 56 of the
237 deals, and could have a tendency to only remember
the deals with higher valuations.
The median and average valuations were
$4.0 million and $5.6 million, respectively. In
2013, the median valuation was $5.0 million
and the average was $6.1 million.
Figure 31: Company Valuations (k=56)
Panel A: Overall Distribution
Valuation (millions of $)
$2-4M $4-6M $6-8MUp to $2M $8-10M $10+M
NumberofInvestments
18
16
14
12
10
8
6
4
2
0
Median: $4.0 M
Average: $5.6 M

Panel B: New Versus Follow-on
New Follow-on
New Investments
Follow-on Investments
$2-4M $2-4M$4-6M $4-6M$6-8M $6-8MUp to $2M Up to $2M$8-10M $8-10M$10+M $10+M
NumberofInvestments
18
16
14
12
10
8
6
4
2
0
Median: $2.6 M
Average: $4.0 M
Median: $5.9 M
Average: $8.2M
ICT
Other
NumberofInvestments
18
16
14
12
10
8
6
4
2
0
$2-4M
$4-6M
$6-8M
Up
to
$2M
$8-10M
$10+M
$2-4M
$4-6M
$6-8M
Up
to
$2M
$8-10M
$10+M
$2-4M
$4-6M
$6-8M
Up
to
$2M
$8-10M
$10+M
Panel C: By Industry Sector
Median: $4.0 M
Average: $7.1 M
Median: $4.0 M
Average: $4.7 M
Median: $2.7 M
Average: $5.5M
Life Sciences
ICT Life Sciences Other

4.10 Comparison with the US Angel Capital Market
Data on the US Angel capital market is published by the
Angel Resource Institute in the Halo Report. The Report
on Angel Investing Activity in Canada has a more
comprehensive coverage. Canadian statistics are compared
with the US statistics for the year 2014 where possible.11
ICT and Life Sciences are by far the most important sectors
for both the Canadian and US Angel capital markets. In
the US, “Internet”, “Mobile & Telecom”, and “Software”
combined, attract 54.1% of deals. This is almost identical
to the 55% share of ICT in the total number of deals
(Figure 15). “Healthcare” attracts 18.3% of investments
in the US, while the figure in Canada is 22%. In terms
of amounts, the Halo Report indicated that 57.8% of all
investment went towards one the three ICT sub-sectors,
while the percentage for ICT in Canada is 42% (Figure 19).
Life Sciences investments attracted
41% of total invested amounts in Canada and 24.8%
in the US. In conclusion, in both countries ICT is the
primary and Life Sciences the secondary recipient of
funding by Angel groups. In relative terms ICT appears
to be an even more important sector for the US than for
Canada, while the Life Sciences sector is relatively more
important for the Canadian Angel capital market.
The median deal size of Canadian investments in ICT
companies was C$650,000, while the median deal sizes
for US investments into Internet and Mobile/telecom
companies were C$1.32 million and C$1.36 million,
respectively (Table 6). The median deal size of Canadian
investments in Life Sciences companies was C$1.40
million, while the median deal sizes for US investments
into this industry was C$2.21 million. Deal sizes are
therefore much larger in the US. For ICT deals, they
are about double the Canadian deal sizes. However,
Healthcare deals are close to 60% larger in the US.
11
The 2014 ARI Halo Report was released on April 15, 2015. It was based on 870 deals reported by US Angel groups. See http://www.Angelresourceinstitute.
org/Research/Halo-Report/Halo-Report.aspx.
12
All USD values reported in the 2014 Halo Report are converted to CAD based on the average 2014 exchange rate of 1.104, as identified by the Bank of Canada:
http://www.bankofcanada.ca/stats/assets/pdf/nraa-2014-en.pdf
In both the US and Canada, ICT and Life
Sciences are top recipients of funding.
Deal sizes are much larger in the US. For ICT
deals, they are about double the Canadian
deal sizes. For Healthcare deals, they are
close to 60% larger.

Last year’s report also showed much smaller deal sizes in
Canada than in the US. Syndication could be part of the
explanation, but the proportion of the US investments
that are syndicated is unknown. The Halo report does
publish deal size for investments that are syndicated with
non-Angels.
The median deal size for such Canadian investments is
C$0.76 million, while the corresponding US deal size is
close to three times as large, namely C$2.21 (Figure 30).
Investments that only involve Angels could be made by
just Angel group members (in this case the deal size equals
the Angel group commitment – see line 3 of Table 6), or
there could be syndicated with Angels outside the group.
An analysis of the Canadian data reveals that the median
deal size in Canadian Angel-only deals was C$0.43
million, while the US Angel-only deal size was C$0.88
million, just over double the Canadian deal size amount.
In conclusion, deal sizes are much smaller in Canada
than in the US. Both Angel-only investments and deals
that are syndicated with VCs, government, or “Other”
investors contribute to this outcome.
With Angel group deal sizes being much smaller in Canada
than in the US, it is expected that valuations are much
smaller in Canada as well. However, last year the reported
Canadian valuations were substantially higher than those
reported in the US. Median company valuation of C$4.0
million was associated with Canadian deals (Figure 31),
while the figure for the US was C$3.3 million. In 2014 the
reported valuations of companies backed by US Angel
groups are 17 percent lower than the reported valuations
in Canada.
The reported valuations of companies backed
by US Angel groups are 17 percent lower than
the reported valuations in Canada.
13
A possible (yet untestable) explanation for the higher-than-US Canadian valuations is sample selection. The survey respondents only report valuations for 56
of the 237 company investments. It is possible that there are disproportionately many high-valuation deals among the valuations that respondents know. If so,
there would be an upward bias in the reported valuations for Canada.

4.11 Distance from the Angel Group
A common finding in the literature on Angel investing is
that the majority of Angel investments are made by local
investors. Perhaps this is because it is easier to add value
through advice and monitoring when located nearby.
Or it could be that a possible bias against placing an
investment at a distance exists during the investment
selection stage. However, more recent studies show that
a substantial minority of Angels are no longer located
near portfolio companies, which points to a more subtle
role for distance in the Angel capital market.
4.11. Distance from the Angel Group
Data on the distance between the Angel group and
the investee company was available for 168 deals. The
bulk of Angel group deals targeted firms in the same
city (36%) or elsewhere in the province (55%). A small
number of deals targeted firms outside the province (8%)
or abroad (1%) (Figure 32). While most deals were made
within the province, there were fewer deals in the same
city than in the past. In 2012 and 2013 over half of the
deals were located in the same city.
Figure 32: Distance of Companies from Angel
Groups: 2012-2014
Year
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2013
(k=139)
2014
(k=168)
2012
(k=92)
PercentageofCompanies
Same City
Rest of Canada
Same Province (Different City)
International
41%
3%
56%
38%
6%
52%
4%
55%
8%
36%
1%
The bulk of Angel group deals targeted firms
in the same city (36%) or elsewhere in the
province (55%).

4.12 Stage of Development
Angels are sometimes assumed to play a particularly
important role in the very early stages of company
development, whereas venture capital investors are
known to gravitate towards “later-stage” startups.
This survey collected a rudimentary measure of firm
development stage for 103 of the 217 reported deals.
Of the 103 deals, 45% were in pre-revenue and 55%
in post-revenue companies. In 2013, the percentage of
investments in pre and post-revenue companies were
46% and 54%, respectively.
4.13 Company Size
The largest proportion (45%) of deals was in very small
firms with 1–5 full-time-equivalent employees (FTE) at the
time of investment. Companies with 6-10 FTEs and 11-25
FTEs each received about 25% of the amount invested by
Angel groups in 2014, while 6% of the investee companies
had more than 25 employees (Figure 33). The size
distributions for 2012 and 2013 look similar to that of 2014
(Figure 33).
Figure 33: Company Employees at Investment Moment
2012-2014
1 to 5
6 to 10
11 to 25
26 to 50
51+
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Year
2013
(k=55)
2014
(k=111)
2012
(k=87)
PercentageofCompanies
18%
26%
3%
2%
49%
31%
24%
44%
1%
25%
24%
45%
5%
1%
The largest proportion (45%) of deals was in
very small firms with 1–5 FTE employees at
the time of investment.

4.14 Assistance Through Government Programs
Angel group managers reported that 28% of their
investments (67 of the 237) were placed in companies
that benefited from government programs, while the figures
for 2012 and 2013 were 38% and 22%, respectively
(Figure 34). The actual uptake of government programs
is almost surely higher than 28% as many managers fail
to answer this question. Figure 34 provides an overview
of the programs used.
The British Columbia Small Business Venture Capital Tax
Credit and the Scientific Research & Experimental
Development (SR&ED) supported all seven BC companies
that reported receiving a benefit from a government program.
The Industrial Research Assistance Program (IRAP) program
supported six of these seven companies (86%).
4.14. Assistance through Government Programs
The Nova Scotia Government’s Equity Tax Credit program
supported two of five (40%) Nova Scotia-based companies.
All companies were supported by the Atlantic Canada
Opportunities Agency (ACOA) program (100%).
There were 53 Ontario-based companies for which
government program data were reported. In 33 of these
53 companies (62%), the Investing in Business Innovation
program of FedDev Ontario was leveraged. The Northern
Ontario Heritage Fund Corporation (NOHFC) supported
10 companies (19%), the Ontario Centres of Excellence
(OCE) program supported six companies (11%), while the
Health and Technology Exchange (HTX) supported one
company (2%).
Figure 34: Government Programs Leveraged (k=68)
Government Program
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
PercentageofDeals
56%
52%
Scientific Research
and Experimental
Development (SRED)
Industrial Research
Assistance Program
(IRAP) at the NRC
36%
Programs with
Provincial/Regional
Scope

5.1 Method of Exit
5.2 Time to Exit
5.3 Return on Investment
53
54
54
5 | Exits in 2014

An exit takes place when current investors in a company
divest their shares such in an IPO, or a merger and
acquisition (M&A). Current investors can also divest after
another shareholder, or even a company insider, makes
an offer. The survey attempts to track all these types of
exits as well as bankruptcies. However, capturing exit
data remains a challenge as only 10 exits were reported in
the 2014 survey.
5.1 Method of Exit
Ten groups reported exits from nine companies (Table 7).
There was one IPO in 2014 by a Life Sciences company.
Of the nine M&A’s, there were six in ICT (5 companies),
two in Manufacturing, and one in “Other Industry”. Three
ICT companies were reported to have gone out of
business in 2014.
Table 7: Investment Outcomes Occurring in 2012-2014
IPO M&A Sale to New or Existing
Shareholders
Company Ceased
Operations
2014 1 9* 0 3
2013 1 4** 3*** 4
2012 1**** 2 4 2
* Nine exits were reported by the Angel groups, but from eight companies as one of the companies received funding from two Angel groups in our survey
** Four exits were reported by Angel groups, but from three companies as one of the companies received funding from two Angel groups in our survey.
*** Including one that was discovered after the release of the 2013 Report on Angel Investimg Activity in Canada
**** Discovered after the release of the 2012 Report on Angel Investimg Activity in Canada
5 | Exits in 2014
Ten groups reported exits from nine
companies. There was one IPO and nine
M&A’s.

5.2 Time to Exit
An analysis of the length of time Angel investors held
companies in their portfolio revealed that in four cases
the investors had acquired the shares recently (in 2013
or 2014), which translate into a maximum of 2 years of
holding time. In three cases, investments were made
in 2009 or before (Figure 35) which indicates a holding
period of 5 years or longer.
5.3 Return on Investment
It is not possible to give any useful feedback about the
return on Angel deals. The volume of exits is quite small
and return statistics are unfortunately not reported.
Figure 35: Length of Time to Exit or Bankruptcy (k=13)
Year of Original Investment
2013 2012 20112014 2010 2009 or
Prior
NumberofExits
4
3
2
1
0
IPO
Sale to New or Existing Shareholders
M&A
Company Ceased Operation
2 2 1
1
1
2
1
1
1
1

6.1. Methodology
6.2. Profile of Canadian Firms at the Year
They First Receive Angel Financing
6.3. Performance of Angel-Backed Firms
in 2012
56
57
61
6 | Economic Profile of Angel-Backed
Firms14

6.1 Methodology
A longitudinal dataset of Angel-backed firms was created
by linking 155 companies identified in NACO’s Canadian
Angel Group Surveys of 2010, 2011 and 2012 to the
Business Register at Statistics Canada.15
There were 110
firms that were successfully matched to the Business
Register out of the 155 firms in the NACO dataset, which
translates into a 71% match rate.
Officials at Statistics Canada were provided with the
necessary identifiers to gather financial and employment
data. Payroll remittance forms (PD7) were used for
employment and payroll data, which employers are typically
required to submit to the Canada Revenue Agency each
month or each quarter. Corporate balance sheet information
and income statement data are provided from the annual
corporate income tax returns (T2). The variables that were
made available from this source are: Total Revenue, Total
Expenses, Net Income, and Research & Development
expenditures16
.
The list of Angel-backed firms was divided according to
the year the firm received its first round of Angel
financing into cohorts (2010-2012). Descriptive tables
were generated describing the economic profile of each
cohort in terms of revenue, employment, R&D spending,
wages and salaries paid, and profitability. To further
preserve confidentiality, these profiles were aggregated
into a single profile for the three cohorts. The results of
this analysis are presented in section 6.2.
The performance of surviving Angel-backed firms in
2012 was also compared to that of three groups of
similarly-sized17
firms. These groups are: (1) firms in
the Manufacturing sector; (2) firms in the Professional,
Scientific and Technical Services sector; and (3) all R&D
active firms. Only firms with 100 employees or fewer were
included in the comparator groups. The results of this
analysis are presented in section 6.3.
It should be noted that at no point in the project, were
Industry Canada or NACO researchers able to view
micro-level data for individual firms. Statistics Canada
abides by the highest standard to protect the confidential
nature of these data.
There was a 71% match rate between
companies in the Business Register and
companies in the NACO dataset.
6 | Economic Profile of Angel-Backed Firms14
14
This Section was developed by Industry Canada. The longitudinal data from the NACO 2010-2012 surveys were linked to administrative databases by
Statistics Canada. An analysis was performed on aggregated data to generate the descriptive statistics reported in this chapter. All micro-data from
Statistics Canada is confidential and is not observable by any Industry Canada or NACO employee.
15
The list of 155 firms was linked to the Business Register through an automated and manual matching process based on the name and address of the firms.
To increase matching accuracy, the firms were matched to the year in the Business Register corresponding to the year they first entered the NACO database,
which usually corresponds to the first year they received Angel funding. The study covers 2010-2012 because at the time of the analysis, Statistics Canada
firm level databases only extended to 2012.
16
This study used the amount that companies claimed for the Scientific Research and Experimental Development (SRED) tax credit.
17
Small firms are those that employ 1 to 100 employees. All Angel-backed firms from the 2010 to 2012 surveys were small that were successfully matched
were small.

6.2 Profile of Canadian Firms at the Year They
First Receive Angel Financing
A large proportion of Angel-backed firms were R&D
performers18
Of the 110 firms in the dataset, 67 (60%) reported R&D
spending in the year they first received Angel financing.
Furthermore, 46% of R&D active Angel-backed firms
dedicated between 10% and 30% of their total expenses
to R&D activity, while a third dedicated more than 30%
(Table 8). These firms also spent substantial amounts
on R&D activity on a per-employee basis, with 56% of
them dedicating $40,000 or more per employee to R&D
activity (Table 9).
56% of Angel-backed firmed dedicated
$40,000 or more per employee to R&D activity.
18
Reported at least $1 of R&D expenditures in their T2 tax return.
19
R&D Intensity has been defined as R&D spending as a percentage of total expenses, i.e. Total R&D Expenditures/Total Expenses, which are both taken from T2.
20
R&D intensity is defined as (Total R&D expenditures/Total Expenditures)
21
That is, Total R&D Expenditures/Annual Average number of employees from T2 and PD7, respectively.
Table 8: R&D Performers in First Year of Angel
Financing by R&D Intensity19
R&D Intensity20
(R&D spending
as a % of total
expenses)
Number of Firms %
≤10 % 14 21%
10.01% -30% 31 46%
>30% 22 33%
Total 67 100%
Table 9: R&D Performers in First Year of Angel
Financing by Average R&D Spending per Employee
R&D Spending per
Employee21
Number of Firms %
≤$40K 28 44%
$40.01K - $60K 18 29%
>$60K 17 27%
Total 63* 100%
* Employment data was not available for 4 R&D performers

Table 10: R&D Performers in First Year of Angel Financing by Total R&D Spending
R&D Expenditures * Number of Firms % R&D Spending ($ million) %
≤$100k 23 34% $1.10 6%
$100.01K - $500 33 49% $9.20 46%
$500.01K - $5M 11 16% $9.50 48%
Total 67 100% $19.80 100%
* As reported on their T2 Tax return.
In total, these 67 Angel-backed firms spent $19.8 million
on R&D in the year they first received Angel financing,
an average of $295,000 per R&D active firm. Sixteen
percent of these R&D active firms accounted for almost
half of the total R&D spending of that population (Table 10).
They were generally small in size
Angel-backed firms were very small, both in terms of
revenue and number of employees in the year they first
received Angel financing. They all had fewer than 100
employees, and 75% of them had 10 or fewer employees
(Table 11).
Table 11: Distribution of Firms by Number of Employees in First Year of Angel Financing
Number of Employees Number of Firms % Total employment %
1-10 66 75% 235 31%
11 -100 22 25% 529 69%
Total 88* 100% 764 100%
* Employment data was not available for 22 firms

Average employment22
during the year of first Angel
financing was 8.6 employees for all firms, 3.6 employees
for firms with 10 or fewer employees, and 24.0 employees
for firms with 11 or more employees. Firms with 11 or more
employees employed 529 employees, which represents
69% of total employment.
Total revenue in the first year of Angel financing was
$500,000 or less for 72% of the firms (Table 12). Average
total revenue was $692,000 across all firms and $154,000
for firms with $500,000 or less in total revenue.
Average employment during the first year of
Angel financing was 8.6 employees.
Total revenue in the first year of Angel
financing was $500,000 or less for 72% of
the firms.
Table 12: Angel-Backed Firms by Total Revenue in the First Year of Angel Financing
Revenue Number of Firms % Total Revenue ($ million) %
≤$100K 30 31% 1.1 2%
$100.01K - $500K 40 41% 9.7 14%
$500.01K - $1M 10 10% 7.0 10%
$1.01M - $10M 18 18% 50.0 74%
>$10M 0 0% 0.0 0%
Total 98* 100% 67.8 100%
* Revenue data was not available for 12 firms
22
Annual average number of employees from monthly payroll remittances.

They also created high-paying jobs
An indicator of the quality of the jobs created by
Angel-backed firms is the average wages they pay their
employees. About 40% of Angel-backed firms paid their
employees an average wage between $40,000 and
$70,000 in the year they first received Angel financing,
while 25% paid average wages that exceeded $70,000
(Table 13).
However, they were not profitable in the year they
received Angel capital.
The majority of Angel-backed firms were unprofitable
in the year they first received Angel financing (Table 14).
As many as 83% of these firms ended the year with a
negative net income. This suggests that their operations
were mainly funded by the founders, Angel investors,
other equity investors, and perhaps other sources of
external capital.
23
Average wage has been defined as Annual wages and salaries/Annual Average number of employees, which are both taken from PD7.
*Average wages data was not available for 29 firms
Table 13: Angel-Backed Firms by Average Wage23
in
First Year of Angel Financing
Average Wage Number of Firms %
≤$40K 29 36%
$40.01K – $70K 32 40%
>$70K 20 25%
Total 81* 100%
Table 14: Angel-Backed Firms by Net Income in First
Year of Angel Financing
*Net Revenue data not available for 15 firms
Net Income Number of Firms %
Negative 91 83%
Positive or missing 19 17%
Total 110 100%

6.3 Performance of Angel-Backed Firms in 2012
Angel-backed firms stand out as highly R&D
focused
In 2012, 60% of the Angel-backed firms were R&D
active, while this was true for less than 8% of the firms in
Manufacturing and Professional, Scientific and Technical
Services comparison groups. Furthermore, the R&D
active Angel-backed firms spent on average $323,000
on R&D activities, which is at least 40% more than the
average R&D expenditure by R&D active firms among
the three comparison groups (Figure 36).
R&D active Angel-backed firms spent on
average $323,000 on R&D activities…at least
40% more than the average.
Figure 36: Average R&D Spending in 2012, R&D Active
Angel-Backed Firms and Firms in Comparison Groups
$323k
$141k
$231k
$159k
Angel-Backed Manufacturing Professional
Services
R&D
Performers

R&D active Angel-backed firms also spent more on R&D per
employee than R&D active firms in each of the comparison
groups. In 2012, 43% of the surviving Angel-backed firms
spent at least $40,000 per employee, compared to only
4% among R&D active firms in Manufacturing, 22% among
R&D active firms in the Professional, Scientific and Technical
Services, and 13% among all R&D active firms (Figure 37).
Finally, R&D active Angel-backed firms had greater R&D
intensity than R&D active firms in the three comparison
groups. Forty five percent of the R&D active Angel-backed
firms demonstrated R&D intensity of between 10 percent
and 30 percent, while only 13%, 36% and 22% of R&D
active firms in the Manufacturing, Professional Services
and R&D performers firms in the comparison groups,
respectively, achieved that level of R&D intensity. The
percentage of firms spending more than 30% of their
total expenses on R&D was also the highest among the
Angel-backed firms (Figure 38).
The percentage of firms spending more than
30% of their total expenses on R&D was the
highest among the Angel-backed firms.
Services
R&D
Performers
26%
41%
64%
22%
14%
36%
23%
45%
83%
13%
4%
29%
Figure 38: Distribution of Firms by R&D Intensity in 2012, Angel-Backed and
Comparison Groups
10% 10% - 30% >30%
Figure 37: Percentage of Firms Spending $40,000 or More
per Employee on R&D in 2012, R&D Active Angel-Backed
Firms and Comparison Groups
43%
4%
22%
13%
Services
R&D
Performers

And a majority had less than 10 employees and less
than $1 million in revenue
In terms of size by number of employees, the distribution
of Angel-backed firms was dominated by firms with 10 or
less employees, which was the case with Manufacturing
and Professional services comparison groups (Figure 39).
As illustrated in Figure 40, firms with revenues less than
$1 million represented 84% of Angel-backed firms, 65%
of firms in the Manufacturing comparison group and
93% of firms in the Professional service comparison
group. The R&D active comparison group exhibited a
more balanced distribution.
Figure 39: Distribution of Firms by Employment Size, Angel-Backed and Comparison
Groups
≤10 11-100
Services
R&D
Performers
66%
34%
71%
29%
92%
8%
48% 52%
Figure 40: Distribution of Firms by Average Revenue Size, Angel-Backed and Comparison
Groups
≤$1M >$1M
Services
R&D
Performers
65%
35%
84%
16%
93%
7%
42%
58%

But paid higher wages to their employees than other
firms.
Angel-backed firms provided higher-paying jobs than
firms in the three comparison groups. As shown in
Figure 41, 80% of Angel-backed firms paid average
wages of more than $40K in 2012, while the figures
for firms in the Manufacturing, Professional Services,
and R&D performers groups were 46%, 64% and 68%
respectively.
Angel-backed firms provided higher-paying
jobs.
Figure 41: Distribution of Firms by Average Wage Category in 2012, Angel-Backed and
Comparison Groups
≤$40k >$40k
Services
R&D
Performers
54%
46%
20%
80%
36%
64%
32%
68%

And as expected, Angel-backed firms were less
profitable.
Angel-backed firms were less likely to be profitable in
2012 than R&D active firms in the comparison groups.
They posted a negative income in that year much more
often than firms in the three comparison groups (Figure
42).
Overall, these findings suggest that Angel-backed firms
tend to be R&D intensive, early-stage start-ups that are
not yet profitable and rely on external funding to support
their development activities. They also created quality
jobs as reflected by the high average wages they paid.
Negative Net Income
Figure 42: Percentage of Firms with Negative Net Income in
2012, Angel-Backed and Comparison Groups
77%
38% 33%
38%
Angel-backed firms tend to be R&D intensive,
early-stage start-ups that are not yet profit-
able and rely on external funding to support
their development activities.
Services
R&D
Performers

In the survey follow-up interviews, Angel group managers
identified a number of best practices they believe
contributed to their success. The following seven best
practices were mentioned both this year and last year:
Good record keeping: To monitor the success
and/or failure of investments (to measure returns on
investment (ROI) and improve the Angel groups’
track records).
Collaborating with other partners in the ecosystem:
To save time and complement existing resources,
some Angel groups have partners in the ecosystem
that provide a variety of services. These ecosystem
partners will often: screen presentations, weeding
out companies that are not Angel ready, provide
deal flow to the Angel group, or syndicate with the
group’s investments.
Providing resources to companies: To ensure
companies are investor-ready, many groups offer
services like opportunities to practice pitches, and
bringing in experts to help with due diligence.
Syndication: To diversify investment risk, promote
increasing the number of Angel investors involved in
a deal and the number of deals in a portfolio company.
Many groups found that having relationships with
other Angel groups enables syndication.
Disciplined processes: To improve deal flow and as
a screening mechanism, members use disciplined
processes including having formal screening and
due-diligence processes. Regularly scheduled
meetings foster member engagement and keep
matters professional and timely.
Events and education seminars to attract and
engage members: To engage the community and
help build awareness of the industry. Many groups
hold events that educate members and prospective
members on the topics that are relevant to Angel
investments.
Member events and communication: To keep
members engaged and active, many groups host
member-only special events to foster networking or
send out regularly scheduled newsletters. Meeting in
an informal setting often helps build trust and
relationships between members.
There were two newly mentioned best practices in 2014:
Member engagement through technology:
To facilitate member engagement, many groups use
technology to allow participation from membership
across the globe. Angel groups host webinars and
stream company pitches online for members that
cannot attend meetings and education events in
person.
Member surveys: To understand the investment
preferences of their Angel group members, groups
often conduct surveys of their memberships. These
surveys are an opportunity for the group manager to
learn about their members’ needs.
7 | Angel Group Best Practices and Challenges

Angel group managers identified the following five challenges
facing their groups in 2014. The first four challenges listed
here were also mentioned during the follow-up interviews
in 2013.
Lack of support funding: Many groups rely on
membership fees, funding support from local
government agencies and corporate sponsors to
support operations. A number of groups indicated
that they rely on the work of volunteer members, which
often leaves the groups under-resourced. Group
managers indicated that increased government funding
is needed, expressing the challenge of sustainability.
Membership growth: Long investment time horizons
restrict the Angels’ ability to reinvest in new companies.
The lack of fund recirculation means groups must
recruit new members in order to remain active. Much
of the Angel group managers’ time is spent seeking
new membership in an attempt to address investor
fatigue.
Quality of supply: Finding a well-managed company
with a high potential for growth that 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.
Community awareness: Many groups reported
challenges associated with constantly having to
educate the public on what they do and why they
are valuable to the community.
Membership engagement: Groups rely on members
volunteering their time for pitch coaching, deal
screening, and leading investment. Many members
express interest in a company but do not take the
initiative to take on a formal role to make the
investment happen.

This report provides an overview of the reported activity
level in the visible Canadian Angel capital market. The
year 2014 showed a tentative recovery in the visible
Canadian Angel capital market. The amount invested by
Angel groups increased by 2% over 2013, while the
number of deals rose by 17%. Deal sizes were larger, and
there was an increase in deal flow to the Angel groups.
The following findings also emerged from the report:
1. There was a big shift in the composition of
investments in 2014. New Angel group investments
substantially increased (+66%) over their 2013
levels, while follow-on investments sharply decreased
(37%). In contrast, from 2012 to 2013, there was
a marked decline in new investments and a marked
increase in follow-on deals.
2. Angel investments were concentrated in two sectors:
ICT, Life Sciences. ICT and Life Sciences each
attracted about the same amount of investment.
The average investment and deal size in ICT
companies were relatively small whereas those in
Life Sciences were relatively large.
3. With about $81.0 million in investments, investors
associated with Angel groups located in Central
Canada placed the bulk of the reported $90.5
million invested by Canadian Angel groups. The
remaining $9.5 million is almost entirely invested by
Angel groups located in Western Canada.
4. An analysis of the data from the Canadian Angel
Group Surveys of 2010, 2011 and 2012 found that
Angel-backed companies are small and often R&D
active. They also tended to be R&D intensive, posted
low profitability in the year they first received an
Angel investment, and paid high average wages
compared to companies in three comparison groups.
This suggests that they tended to be high technology
start-ups.
5. The reported exit volume in 2014 continued to be low
with only 10 Angel groups reporting positive exits
from 9 companies. There were eight acquired
companies, one IPO, and three bankruptcies.
There is a concern that many exits were not reported.
6. Of the reported investments, 75% were syndicated
with parties outside the Angel group. Angel groups
make use of several syndication options, with about
half of the deals involving syndication with other Angel
investors. Syndication with VCs, the Government,
or other financiers, occurred in a smaller, yet still
substantial, number of investments.
7. The Report on Angel Investing Activity in Canada
continues to capture more investments every year.
The 2014 survey captured a total of 237 investments
by 30 Angel groups that amount to $90.5 million.
By contrast, the 2013 survey captured 199
investments by 25 Angel groups that amounted
to $88.7 million, and the 2012 survey captured 139
investments by 19 groups worth $40.5 million.
8 | Conclusion

Active members: Angel groups members that participated
in at least one deal during the year.
Application success rate: The reported number of
investments made by the Angel group divided by the
reported number of funding applications received by the
Angel group.
Co-investment: When two or more Angel investors from
the same group participate in the investment.
Comparison Sample: In each year, all Angel groups that
participated in the survey in the current as well as
previous year.
Deal: A deal is an investment round in a single company.
Deal size: The total amount of financing received by a
company from all sources in a financing round, including
from co-investors and syndicate partners. Deal size was
only available for those deals for which Angel groups
provided the information.
Established Angel groups: Angel groups that have
been established at least 6 years ago.
Exit: When Angel investors divest ownership from a
company. For the purposes of this report, only positive
exits are reported, including initial public offerings on a
stock market and mergers and acquisitions.
Follow-on Investment: An investment made by an Angel
group into a company that has received prior funding from
the Angel group.
Funding rate: The reported number of deals divided by
the reported number of presentations.
Investment Amount: For each deal, the amount invested
by a specific Angel group into a single company by group
members. This does not account for other sources of
capital received in the deal
New Angel Groups: Angel groups that participated for the
first time in the survey.
New Investment: An investment made in a company that
has never received prior financing from the Angel group.
Pre-money Valuation (Valuation): The value of a company’s
equity as imputed from the investment or the deal (not
including the round amount which will be transferred to
the company).
Presentation rate: The reported number of firms that
presented to Angel groups divided by the reported number
of firms that requested to be considered for funding from
that group.
Syndication: When investors from outside of the Angel
group are involved in a deal.
Young Angel Groups: Angel groups that have been
established within the past 5 years.
Annex: Data Dictionary and Glossary

Angel One Investor Network is a member-based, not-for-profit organization of accredited
investors who live, work or have strong interests in Mississauga, Oakville, Burlington,
Hamilton and other communities in Southern Ontario. In 2013, Angel One formalized
its practices into a more disciplined approach to company evaluation, due diligence
and process. Since incorporating in September 2011 to December 31, 2014, Angel One
members have invested over $15.8 million into 54 deals across a broad range of sectors:
57% in software as a service, 24% in information, communication and technology 10%
in health care, 5% in clean tech and 5% in industrial. For more information please visit:
www.angelonenetwork.ca
In 2008, Anges Québec launched its operations. The organization has 165 members
and operates in Montreal, Quebec and Estrie. Since launching, Anges Quebec has
made 65 investments in different areas of expertise such as: information technology,
web, life sciences and manufacturing. The average amount per investments is
approximately $500K. In 2012, Anges Québec help established a co-investment fund
of $85M. 30 investments have been made through this Anges Quebec Capital Fund
with Anges Québec members with an average first round investment of approximately
$400K. For more information please visit: angesquebec.com/en/
The Golden Triangle Angel Network (GTAN) is a not-for-profit organization established
under the Ontario Ministry of Research and Innovation’s Angel Network Program (ANP).
From a standing start in September of 2009, GTAN has screened over 300 early-stage
companies, and showcased 200 to our membership which now exceeds 100 investors.
The outcome of this activity is 49 companies funded, with angel investors committing
over $20 million in capital, which in combination with other sources of financing has
resulted in over $45 million of capital infusion into our local, early-stage companies, driving
economic growth and prosperity, and ultimately strengthening the social fabric of the Golden
Triangle Region. For more information please visit: goldentriangleangelnet.ca
The Capital Angel Network is a non-profit, membership-based organization of accredited
investors seeking investment and mentorship opportunities in dynamic, early-stage
companies. CAN provides a supportive network in the National Capital angel community,
developing best practices for due diligence, investing and on-going mentoring. Members
engage with rising entrepreneurs – through funding, expertise and knowledge – to facilitate
valuable learning and growth. Since 2009, CAN has enabled strong ties between
investors and entrepreneurs, strengthening community networks and fostering seed and
early-stage investments. Investors and entrepreneurs in the Ottawa-Gatineau area are
encouraged to get in touch at info@capitalangels.ca.
Top Canadian Angel Groups

iGan Partners is a team of entrepreneurs that invests in dynamic management teams,
empowering them to build the next big idea. We have been through the process of
building large successful businesses and understand the challenges facing growing
businesses, having faced them ourselves. We look for opportunities where we can add
significant value and pride ourselves in helping entrepreneurs achieve success. We are
“Entrepreneurs Empowering Entrepreneurs” and roll up our sleeves to help get the job
done! For more information please visit: www.iganpartners.com
Mistral invests primarily in seed and early stage technology companies who are based
in Canada but have global ambitions. We focus on Internet innovators; meaning those
companies that harness the power of Mobile, Cloud and IoT technology and apply it
in novel ways to existing and new industries. We invest early because we believe in a
hands-on model where we can add significant value at the formation stage of growth.
We leverage our partner base to provide access to executive talent, customers and
follow-on-capital; including with some of the largest and most successful venture capital
firms in North America. For more information please visit: mistralvp.com
We invest in unique private Canadian Healthcare companies unavailable to the investing
public that offer the potential for outsized returns, targeting significant (50-200%) capital
appreciation over a 5 year time horizon. The healthcare market is big and growing and
an aging population provides a favourable demographic backdrop. The Canadian
Healthcare sector has suffered from underinvestment, representing an attractive opportunity.
We look for companies with strong management teams and scalable, disruptive platform
technologies that provide non replicable products or services. Omega Star is currently
transitioning into a Healthcare fund.
Northern Ontario Angels covers North of Barrie to the Manitoba border. This area is
approximately 802,378 square miles and covers 5 larger centers as well as a number
of smaller communities including 120 First Nation communities. We have recently
implemented a Chapter structure that provides for 5 Chapters in our area, one in each
of the 5 larger centers in the North; North Bay, Sault Ste. Marie, Sudbury, Timmins and
Thunder Bay. Our goal is to have a part-time person on the ground in each of these
communities to work with our Investor members and companies seeking investment. Our
strongest success is the Investors that support and believe in our communities by investing
or mentoring new and growing businesses. For more information please visit: www.noeg.info
Omega Star
REVISED OPTION 04-1

The Saskatchewan Capital Network is a member-based, non-profit organization of
Saskatchewan angel investors. We currently have over 40 investor members interested
in seeing good investment opportunities in startup and growth-focused entrepreneurial
companies, particularly those based in Saskatchewan. Through presentation and networking
events, Saskatchewan Capital Network facilitates the introduction of investment-ready
entrepreneurial companies to potential investors. Saskatchewan Capital Network investor
members are interested in technology-based companies with a proprietary product or
service, as well as companies in other industries with high growth potential. Our objective
is to encourage Saskatchewan entrepreneurs to build successful, sustainable businesses.
For more information please visit: saskcapitalnetwork.com
For the past eleven years VA Angels, formerly VentureAlberta Forum, has supported
entrepreneurship and investing around the globe. Investments have been made across
Canada, in the US, Africa, and the UK. In operation since June 2003, VA Angels is one of
the largest gatherings of angel investors in Western Canada with over 125 paid members
with chapters in Calgary, Edmonton (known as TEC VA in Edmonton reflecting the partnership
with TEC Edmonton), Kelowna, Winnipeg and an ex pat chapter in Phoenix, AZ. Since
its inception, the members of VA Angels have financed 102 companies for over $38 million.
Follow us on twitter @VA_Angels For more information please visit: vaangels.com
Top Canadian Angel Groups
Since 1996 XDL Capital Group, led by Dennis Bennie, has supported entrepreneurs
building technology related companies in new and growing business sectors as an early
stage investor. We invest our own monies, uniting our interests with each entrepreneur.
We are focused on our investments, sharing our experience, networks and knowledge
to help them grow and prosper. We’ve participated as founders, CEO, Chair of the board,
directors and advisors in several companies including Delrina (acquired by Symantec), MGI
(acquired by Roxio), Entercept (acquired by McAfee), Delano Technologies (from startup
to NASDAQ listing), Commtouch (NASDAQ:CTCH) and currently serve on the board or
advisor to Newtopia Inc., Appinions Inc. (acquired by ScribbleLive), Nymi Inc., Mill St.
Brewery, Newtopia Inc., Quandl Inc., Vouchr and Linkett. visit: xdl.com

Thomas Hellmann, Committee Chair, University of British Columbia
Thomas Hellmann is a professor at the Saïd Business School, University of Oxford and
the Sauder School of Business, University of British Columbia. He holds a BA from
the London School of Economics and a PhD from Stanford University. His research
focuses on entrepreneurial finance, entrepreneurship, innovation, and public policy.
Paul Schure, Author, University of Victoria
Paul Schure (PhD European University Institute, Italy) is an Associate Professor of
Economics at the University of Victoria. Paul’s research on Entrepreneurial Finance,
Financial Intermediation, and European Integration has appeared in various international
Economics and Finance journals.
Yuri Navarro, Lead Advisor, National Angel Capital Organization
Yuri Navarro is a strategy consultant with more than seven years of experience working
with government and businesses in the Ontario technology sector. Yuri has presided
over the renewal and growth of the National Angel Capital Organization since 2012 by
focusing on the organization’s value to stakeholders and supporting the growth and
professionalization of Canada’s Angel asset-class.
Younes Errounda, Advisor, Industry Canada
Younes has been with Industry Canada for nine years, working on research on innovative
small business, access to smart capital and developing policy to promote Angel investment,
and venture capital. Younes as has a Masters of Art’s in Economics from York University
and a Bachelor’s degree in Economics from Morocco.
Melissa Dodaro, Project Coordinator, National Angel Capital Organization
Melissa hold a MBA from Ryerson University’s Ted Rogers School of Management.
As the Research Manager at NACO, Melissa is responsible for managing all research,
education, and policy initiatives, including the Angel Activity Report.
2014 Report Steering Committee

Shane Dolan, Advisor, Industry Canada
Shane has been with Industry Canada for eight years, developing policy to promote
entrepreneurship, angel investment, and venture capital. Shane has a Masters of
Business Administration and a Bachelor of Commerce.
Jim Valerio, Advisor, Industry Canada
Jim has been developing economic policy at Industry Canada for 12 years in areas that
include innovation, commercialization, entrepreneurship, and access to financing for
innovation-based businesses. This augments 20 years of international private sector
development and senior management experience delivering complex electronic hardware
and software products. Jim is an electrical engineer with a Masters in Business Administration.
Jeri Ross, Advisor, KPMG Enterprise
Jeri Ross is a seasoned research professional with proven abilities in developing and
implementing research projects and methodologies for both internal and external uses.
She has over 15 years of research experience with KPMG and currently serves as the
Director of the National Research team for KPMG in Canada.
Karen Grant, Angel Advisor, Angel One Investor Network
Karen is the founder and executive director of Angel One Investor Network. She was
instrumental in planning and launching Toronto Angel Group in 2001 and Northern Ontario
Angels in 2005. She is currently the Chair of Northern Ontario Angels. She has founded
companies, launched investment funds and has worked in the commercialization field
since the early 1990s.
Erika Kurczyn, Advisor, BDC Capital
Erika Kurczyn is a corporate affairs professional with over 10 years experience in
venture capital, commercial banking, mining, and international trade. Erika holds a BA
(Honours) in International Studies from York University, and has completed executive
training at the Venture Capital Institute, the Rotman School of Management, and McGill
University.

This report is produced by the National Angel
Capital Organization.
The National Angel Capital Organization accelerates a
thriving, early-stage investing ecosystem in Canada
by connecting individuals, groups, and other partners
that support Angel-stage investing. NACO provides
intelligence, tools and resources for its members;
facilitates key connections across networks, borders
and industries; and helps to inform policy affecting the
Angel asset-class.
Contact Information
Ioana Stoica
Marketing and Events Manager
media@nacocanada.com
1-416-581-0009
101 College Street, MaRS Centre, Suite HL30B
Toronto, Ontario M5G 1L7
www.nacocanada.com
Copyright © 2015 National Angel Capital Organization
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.

2014 Report on Angel Investing Activity in Canada

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