Angel Investing as an Asset Class

A N G E L I N V E S T I N G A S A N A S S E T
C L A S S

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AGENDA
WHO ARE TYPICAL ANGELS
WHO ARE MAPLE LEAF ANGELS
ANGEL INVESTING IN CANADA
ANGEL INVESTMENT
QUESTIONS & ANSWERS

MLA CONNECTS
Our mandate is to connect experienced accredited investors, and the brightest, most
passionate entrepreneurs in an effective investment process.

ANGEL NETWORKS IN CANADA
• National Angel Capital Organization ( NACO) - Canada’s
industry association representing Angel capital in Canada
• 28 Angel Groups in Canada
• They have collectively about 1500 investors
• The majority have fewer than 50 members
• 50% of groups set up since 2008
• Network of Angel Organizations Ontario (NAOO) – Umbrella
organization for Ontario based groups
• Currently Southern Ontario Angel Investment community has 13
groups

BOARD OF DIRECTORS
Board Chair
Board Vice Chair
Chair-
Membership
and Events
Committee
Chair-
Technology
Committee
Board
Member
Chair –
Investment
Review
Committee

• Wealthy individuals – “accredited investors”
• “Been there, done that” entrepreneur
• Active investors – invest to engage
• Range of involvement
- Lead investor: Chair of the board
- Investor/advisor
- Passive investor
WHO ARE THESE ANGEL INVESTORS?

• Return on Investment is the Metric (23%-27%)
• Staying involved (sense of usefulness)
• Give back to community
• Affection for entrepreneurs
 Source: Angel Investing – an Overview. Angel Resource Institute
MOTIVATION OF ANGEL INVESTORS

VALLEY Source: Entrepreneurial Energy
ANGEL INVESTMENTS – HOW YOU HELP

• Companies are identified
• Investment Review Committee prescreens
• Coaching sessions for selected companies
• Investment meeting with all the Angels
• Due Diligence Team
• Standard Terms but individual amounts
HOW MLA INVESTING WORKS

INVESTMENT HISTORY
Sentient Magnetic
22 Investments
$9.6 Million +

WHAT ELSE?
PATIENCE IS REQUIRED
• 1X typically takes 2.5 to 3 years
• 10X is expected to take 4-5 years
• 30X could take 8 years or more
• Hint: Angels should not expect high portfolio yields
(IRR) after only three years of investing!

DETERMINING SIZE OF
ANGEL CHEQUES
• Invest in at least 8-10 deals (lifetime)
• Average of two investments per company (many one
or two, but some three or more)
• Allocate 20 investments in total
• Determine total personal assets set aside for angel
investing (3-10% of total assets)
• Divide total commitment by 20 investments
• Write cheques averaging this size for angel deals

Closing Comments
• Angel Investing is a contact sport!
• Direct correlation between the hours spent on Due
Diligence and IRR
• You can expect to spend 40+ hours on Due Diligence
for each investment
• Ongoing Support and Mentorship critical to the
success of ventures

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Angel Investing as an Asset Class

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