If there is any doubt about the rise of the angel community in Canada consider this: the funding of these celestial investors has gone mainstream.
Not only has the Business Development Bank of Canada decided to take some of its cues from angel investors, announcing it would fund alongside them, but both the Emerging Technology Fund of Ontario and the new Federal Economic Development Agency for Southern Ontario initiative are embracing them, too.
The Ontario Capital Growth Corp., or OCG, which manages the emerging fund, has made two investments alongside angels: the first in TeloIP, a Toronto-based technology firm that creates network convergence solutions.
And this past week, it announced a second investment alongside an angel syndicate -- this time Woodland Biofuels, a Mississauga, Ont.-based company that develops sustainable, renewable, clean fuel.
When the Ontario government first established the $250-million fund in the fall of 2008, "it didn't know where the capital [to co-invest in] would be coming from," says John Marshall, president and chief executive of OCG. It was careful to keep the fund open to all sources -whether it be foreign capital, corporations or venture capital.
At first, angels were worried about the whole disclosure side, Mr. Marshall says.
But the government has assured them they don't care about their boats or cottages, only that they could continue to co-invest along with the government.
With two projects under his belt, Mr. Marshall predicts the angel groups will bring more deal flow, and has plans to do more outreach in January and February.
The goal: to reassure angel groups this project is designed for angel investment.
Ditto for the federal government. Its new business innovation fund, which alone is worth $210-million, will be making investments soon, according to angel investors who have already started filling out their application forms.
The initial goal of Fed Dev was to create immediate jobs but, as things improve, the focus has been on "better quality, longer-lasting jobs with significant input in the local economy," says Minister of State for Science and Technology Gary Goodyear.
There are seven envelopes under the Fed Dev umbrella, several of them focusing on youth education and graduates.
The reason: the government felt there were not enough young people entering science and technology programs, and even those who graduated were not staying in their areas of expertise. Not because businesses didn't need them but because they couldn't afford them, Mr. Goodyear says.
So why are so many of the funds funnelling through institutions? This is the same theme I've raised when looking at some of the Ontario initiatives.
Mr. Goodyear argues that institutions provide another level of accountability and do due diligence, and this allows the government to move faster.
He also says, "I do want our universities and our colleges to participate more in the economic strength of the nation and the partnerships we've created do both."
cOOL !!
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