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Financing Your Innovation: (More) Angels & VCs

Futurpreneur | October 18, 2011

Sandy Robertson, Georgian Angel Network, Collingwood, ON, CYBF Mentor

Financing Your Innovation Series – Part 3 of 3

Capacity within the angel market continues to grow, and with the advent of inter-group syndication, larger deal sizes (in excess of $1MM for the right opportunity) are now possible.

FedDev Ontario has created a significant lift for both founders and angels in Ontario through their well-conceived Investing in Business Innovation program and repayable contributions to leverage equity investments. Also, Ontario’s Ministry of Research and Innovation funding is possible through OCE and other vehicles like the IAF, OETF and HTX (similar programs are available in other provinces) to leverage or complement angel capital even further.

Venture capitalists (VCs) come into play once the dollar amounts start running into the millions. VCs are professionally managed, as opposed to angels who invest their own personal capital, and they come at a different price again. A recent trend with VCs has been to lower the floor threshold amount per investee. This is happening because institutional money is becoming increasingly scarce due to well-documented disappointing returns. Remember that not all VCs are created equally and you will need to match your opportunity to their sector strengths and preferences.

See the entire Financing Your Innovation series: