NAO President Dan Mothersill
Do our neighbors to the north know how to get their money out of a deal better than we do here in the US?
Let's compare: what's the state of angel investing in Canada compared to the US? Oh, you think you know?
Canadian angels invest twice what Canadian VCs do in early stage deals, whereas, according to the National Angel Organization President Dan Mothersill, in the US the numbers are close to equal. Canadian VCs have abandoned seed, early stage and even A rounds. So since angels are doing the $1, $2, $3, $6 and even $11 million deals, they've got to partner.
Are Canadian angels enjoying better exit opportunities than their US peers? According to Dan they are.
Show #180 (49:12)
Comments
There are some good reasons why VCs in Canada have essentially left the early stage investing market - including issues caused by their own doing.
Interestingly, while Angels are more active on a relative basis in Canada, the vast majority of it is friends and family money, or by Angels with little experience in venture funding, or investors in companies on the junior exchanges - which is usually an investment with no or minimal terms. As such, how sustainable is it ?
However, as more Angels become sophisticated at venture investing and collaborate more with other early stage investors serious about success when supporting entrepreneurship, then there is a huge upside for all stakeholders - in both the US and Canada.
Posted by: Ron Thompson | September 23, 2008 05:35 AM
I've really been enjoying your podcasts!
I'm getting my perspective updated. I thought that Angels were either A) wealthy, bored businessmen who had sold off their companies for more money than they could ever spend, looking for a "kid" with a good idea to mentor, or B) a group of doctors who want to tie up their disposable income before their wife buys a Ferrari for the pool boy. Either way, I thought Angels were ready to jump when something delicious pops up.
I see now that they don't do much jumping. They seem to flock in groups too large for any kind of fast action. They create a program, a beaurocracy, and have the entrepreneurs march in line for several months under scrutiny.
I'm not saying that's wrong. Of course there's safety in numbers, and I actually admire the way they've organized. It's just frustrating to me because if I could get going soon I could put my product, little boats, on the market next summer. Spendiing a couple months in line means I introduce boats during the fall or winter- a time of little interest in aquatics, to the market and the media.
I'm a patient man; I've been on this project a long time, so I guess I go get in line with the others.
I'm writing to thank you for doing your show, and for your help with my ES. Keep it up; you're a beacon of wisdom to us dreamers.
Posted by: Ed Hook | September 23, 2008 07:13 PM
Well done!
Posted by: Rick Holdren | September 23, 2008 07:17 PM