Looking Back on a Decade of Angel Investing
By Ross Finlay
Time DOES fly when you’re having fun! When Brian and I started First Angel Network (FAN) in 2005, it was meant to be a small venture to find great start-ups for angel investors in Atlantic Canada. We thought a few days a month is all it would require. (Side bar: the name was chosen when Brian noted that we would be the first angel network in Atlantic Canada – it stuck!)
Ten years later we’ve made thirty-five investments in thirty companies and co-invested in twelve deals with many organizations and angel groups across Canada and into the United States. These investments total more than $14.5M. We’ve had the pleasure of getting to know over two hundred angel investors in this region through their membership support.
Since the beginning, we’ve had tremendous encouragement and financial support from the Atlantic Canada Opportunities Agency, NRC-IRAP, PwC LLP and Stewart McKelvey. Our growth has been reassured with their partnerships and, together, we continue to contribute to the health of SME’s in this part of Canada. We are all aware that 90% of the job creation in this country comes from companies under 5 years of age.
So what has 10 years of experience taught us? Quite a bit actually. First of all, we’ve gotten a lot smarter over those years. Having seen over 700 early stage opportunities, one gains a sense of the consistency and magnitude of the challenges each company faces in getting to commercial viability.
Today it takes a lot more information and evaluation than it used to for us to “fall in love” with a technology. Our due diligence process has become much more sophisticated than in the early years. On this front we’ve learned a lot! Our investment terms have also become more sophisticated and we understand that they have to be beneficial to both the entrepreneur and the investor.
We’ve learned that, in almost every case, the most important value we provide to our portfolio companies comes after the investment. We’ve supported our entrepreneurs by leveraging our contacts and providing advice around corporate governance, financing and/or exit strategies, team building/recruiting, and crisis management. In fact, portfolio management is now a significant part of the work we do at First Angel Network.
Education has also become more important over the years. The private equity investment world has become more complex and the economic development environment is constantly changing. We’ve kept ahead of the curve by networking with other angel groups and adapting a continuous learning approach to what we do.
Over the last ten years FAN has become a major element of the entrepreneurial ecosystem in Atlantic Canada. We have championed the emergence of the angel investment community. We’ve worked diligently to maintain and grow a robust formal angel network. We’ve helped develop and support the important linkages in the region’s economic development community.
Throughout the ten years we have stuck to our basic tenet – that we are about finding extraordinary opportunities for our members to support. The core element to angel investing has not changed. Its about relationships and trust. We have continued to expand our circle of contacts and now we have excellent, trusted connections around the world. We hope the next 10 years will be as exciting.