accessing angel capital in canada presented by the bulgarian chamber in association with the british...

ACCESSING ANGEL CAPITAL IN CANADA

Special Guest Speaker

GERARD BUCKLEYPresented by:

CBBN “The Bulgarian Chamber” in association with BCCTC “The British Chamber” and BCBC “The Belgian Chamber”

In short referred to as The 3 B’s

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

3

• What is Angel Investing

• Who is an Angel Investor

• Why Invest in Early Stage Companies

• Angel Network in Canada

• NACO 2013 Survey

• Angel Investing is a changing

• The Benefits for Entrepreneurs

• Q & A

Agenda

www.mapleleafangels.com | info@mapleleafangels.com | 416.646.6235 | @mapleleafangels

4

• I am Gerard Buckley– Founder & CEO of Jaguar Capital an Advisory Practice for Growth Companies in

Governance, Financial Management & Funding Strategies

– Chairperson of Board of Directors, Maple Leaf Angels Corporation & Investor in eight early stage companies

– Corporate Director, Maple Leaf Angels Capital Corporation the General Partner of MLA48LP1 an Angel Backed Pre-seed Investment Fund

– Nominated & Finalist for National Angel Capital’s Angel of The Year in 2014

– Certified Corporate Director of the Institute of Corporate Directors

– Previously Entrepreneur in Residence with Incubes (An Internet Company Accelerator)

– Past member of Small & Medium Enterprise Committee of The Ontario Securities Commission

– Investment Committee of Mount Saint Vincent University, Halifax, NS

– 32 yr. Career with Scotia Capital as a Financial Risk Management Advisor to Fortune 200 Companies: Rogers, Irving Group, Empire Co., Four Seasons, Bruce Power, OPG, Province of Ontario, Ford etc.

Who Am I

www.mapleleafangels.com | info@mapleleafangels.com | 416.646.6235 | @mapleleafangels

What is Angel Investing

• Angel Investing is individuals investing their personal money in the equity or debt of a Early or Growth Stage Company

• Often referred to as Smart Money, it is where individuals wish to invest their time or experience as well money in a start-up company.

• People wishing to give back their experience so others may benefit which is often referred to as mentoring or serving on a company Advisory Board or Board of Directors

• Angel Investing is Active Investing not Passive

www.mapleleafangels.com | info@mapleleafangels.com | 416.646.6235 | @mapleleafangels

Who is an Angel Investor

• Angels are investors who leave out the control. They essentially bundle Advice and Money

• A person prepared to invest their personal or family money

• A person who can add value to the company• An accredited investor as defined by OSC 45-106• A member of an angel network• The majority of angel investment in Canada is

completed by individuals >85%• Estimate of Cdn Angel Investment is 916mm in

approx 1500 companies (VC about 2b)

www.mapleleafangels.com | info@mapleleafangels.com | 416.646.6235 | @mapleleafangels

Profile of an Angel - Median

Years investing 9

Number of Investments 10

Total Exits 2

Years as a Entrepreneur 14.5

Number of ventures founded 2.7

Age 57

Percent of net worth 10%

Education Masters Degree

Angel Resource Institute Source: Wiltbank Study 2007

www.mapleleafangels.com | info@mapleleafangels.com | 416.646.6235 | @mapleleafangels

Why Would Someone be an Angel Investor

• Qualified Opportunities

• Opportunity referral

• Increased Capital Diversification

• High Risk Asset Class …. Seeking High Returns

• Favourable Valuation and Terms in comparison to VCs

• Networking

• Portfolio company mentoring or engagement

• Shared Due-Diligence

• Advisory Board and Board of Director Roles

www.mapleleafangels.com | info@mapleleafangels.com | 416.646.6235 | @mapleleafangels

What Type of Companies Do Angels Invest In?

• Companies who are in seed and early stage.

• In technology, life sciences, ict, health care devices, med tech, clean tech, power solutions, fin tech, …..

• Solve a Problem, Secret Sauce or technology ....... USP, validated business model, Great management team

www.mapleleafangels.com | info@mapleleafangels.com | 416.646.6235 | @mapleleafangels

Equity Capital Life Cycle

www.mapleleafangels.com | info@mapleleafangels.com | 416.646.6235 | @mapleleafangels

What Angels Look For

• High anticipated growth rate – Scalability

• Experienced management team

• Sustainable competitive advantage

• Barriers to entry ie. Exclusive IP

• Clear strategy for commercialization

• Proof of concept or enterprise level validation

• Business model anchored in Reality

• Investor exit strategy in 5 to 8 years

• Investing in what you know – vertical expertise

• Coach ability of the entrepreneur

• Amount of dilutive capital required

www.mapleleafangels.com | info@mapleleafangels.com | 416.646.6235 | @mapleleafangels

Factors that appear to impact investor outcome

• Due diligence time: More hours of due diligence positively related to greater returns (> 40 hours)

• Experience: An angel investor's expertise in the industry of the venture being invested

• Participation: Angel Investors that interacted with their portfolio companies at least a couple of times per month mentoring, coaching, providing leads and monitoring performance experienced greater returns.

www.mapleleafangels.com | info@mapleleafangels.com | 416.646.6235 | @mapleleafangels

Selection Criteria

• Pre-seed Investments up to $200k

• Seed investment should be from $250k to $500K

• Early stage investments should be from $350k to $1,500K

• Valuation 1.5 to 4.5 million (Halo 2013 median 2.5m)

• The stage, quality of the management team, valuation and technology of companies are more important than the sector criteria

• Quality is more important than quantity

• In Canada 5% of companies get funded (95% don’t)

• In Silicon Valley (1/300) get funded

www.mapleleafangels.com | info@mapleleafangels.com | 416.646.6235 | @mapleleafangels

Angel Network’s in Canada

• NACO – National Angel Capital Organization

• 32 Angel Groups in Canada

• They have collectively over 2100 investors

• Three large groups accounted for 58%

• The majority have fewer than 50 members

• 75% of groups set up since 2007

• 68% not-for-profit, 14% for profit & 18% not incorporated

• Vast majority do volunteer shared due diligence

• 12 Angel Groups in Ontario

• Keiretsu Forum & Golden Horseshoe Venture Forum are Private For Profit Angel Groups

www.mapleleafangels.com | info@mapleleafangels.com | 416.646.6235 | @mapleleafangels

Canadian Angel Group Investment Activity 2013

• 199 Investments in 2013 totaling $89 m, an increase from 2012 of 139 investments and a increase in investment from 40.5 m

• Average investment is $504k up fr $314k 2012

• Of over 2100 investors 78% - Ont & Que, 21% West, 1% Atlantic

• ICT (45%), Life Sciences (33%), Clean Tech (13%)

• Valuation – Median $5.0m, Mean 2.06m

• 61% of transactions involved a co-investor

• Of 3775 applications in Canada 5.2% get funded by networks

• Angels in Canada appear increasingly able and willing to provide follow-on funding to carry companies through to the next stages of growth

www.mapleleafangels.com | info@mapleleafangels.com | 416.646.6235 | @mapleleafangels

Traditional Angel Network is Changing

• Currently Southern Ontario Angel Investment community has 12 Angel groups

• Government programs ( IAF, MaRS, OCE, IBI)• Online - Angel List, Syndicates, Funders Club, The Funded, Gust• Y Combinator, Tech Stars, 500 Start-ups, +110 Accelerators in

Canada …. Consolidation occurring to access gov’t funding• Incubators & Accelerator funds • Crowd funding such as kickstarter.com and equity crowd funding

will follow• Introduction of OM - Offering Memorandum will have an impact• Super Angels & Micro-VC’s• “Future of Venture” – unbundling of advice, money and control• Super Angels & Micro-VC’s

www.mapleleafangels.com | info@mapleleafangels.com | 416.646.6235 | @mapleleafangels

17www.mapleleafangels.com | info@mapleleafangels.com | 416.646.6235 | @mapleleafangels

18

Entrepreneur Benefits

• Large capital source

• Broad pool of Knowledge & Contacts

• Efficient Process

• Capital Connections

• In many provinces there is investor tax credit

• Leverage sources of funding (IAF, IBI, BDC etc.)

• Focus on value-add and advice, not the biggest cheque

www.mapleleafangels.com | info@mapleleafangels.com | 416.646.6235 | @mapleleafangels

Questions Entrepreneurs Should Ask Angels or Venture Capitalists

• Where does your deal flow come from?• Do you charge for presentations? Or charge for due-diligence?

Or Performance Fees?• How much management Fee do you charge? How much

interest carry do you charge investors? • How often do you hold pitches?• Do you help prepare pitches?• Do you invest together or make a investment decision

separately?• Do you have a fund or make pre-seed investments?• Do you disclose your investment process?• Who will your board nominee be?

www.mapleleafangels.com | info@mapleleafangels.com | 416.646.6235 | @mapleleafangels

20

Gerard Buckley, BBA, FICB, ICD.DPresident and CEO Jaguar Capital Inc.(C) 416-884-9522

g.buckley@jaguarcapital.ca

www.jaguarcapital.ca

Twitter: @jaguarcapitalTwitter: @gerardbuckleySlideshare: Jaguar Capital

Contact Information

www.mapleleafangels.com | info@mapleleafangels.com | 416.646.6235 | @mapleleafangels