Backbone Magazine | By Ian Harvey |November 28, 2013

For start-ups, it’s always about the money. With the exception of serially successful entrepreneurs, early-stage companies only get so far bootstrapping or begging funds from family and friends. Enter two of the fastest-growing sectors of start-up funding in Canada: crowdsourcing and angel investors. With some well-publicized success stories, government policy shifts and funding assistance from players like the National Research Council, the Business Development Bank of Canada and angels, the money is flowing.

Related:  Join the National Crowdfunding Association of Canada today

With $1 billion to invest, BDC is emerging as the go-to partner, galvanizing angel groups and working with accelerators like GrowLab, Extreme and Communitech. “Our mandate is to help high-growth-potential people build their business better and faster,” he said.

For example, a 90-day program at Communitech exposes entrepreneurs to hundreds of other successful entrepreneurs who mentor them, and the best of them go forward to a pitch day in front of angels and VCs. Those selected get $150,000 in the form of a convertible note from BDC, which sets terms and conditions for investments from angels, and some go on to raise more based on that initial kick start.

“We had one start-up that raised $600,000 from angels on top of the $150,000,” he said.

In the case of the Real Ventures Fund, BDC put up $3 million, which then prompted angel groups to invest another $15 million. Today, Real Ventures has 44 companies in its portfolio with an average $185,000 investment in each.

Against all this BDC interest, however, the glue holding the ecosystem together is the angels, who are there investing long before the venture capital funds or the banks.

Angel investors aren’t just people with money to burn, said Yuri Navarro, national director of the National Angel Capital Organization (NACO). Under federal tax regulations, qualified angel investors must have $5 million in assets and $1 million in liquid assets with a $200,000 yearly income. While 500,000 Canadians meet that standard, not everyone is an angel investor; Navarro said there are 200 to 500 serious angels in Canada, but no one knows for sure.

NACO has a membership list of more than 2,000, including angel groups and their members. “This number is what we consider the ‘visible’ Canadian angel community,” Navarro said. “It’s only a fraction of the total community.”

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The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada crowdfunding hub providing education, advocacy and networking opportunities in the rapidly evolving crowdfunding industry. NCFA Canada is a community-based, membership-driven entity that was formed at the grass roots level to fill a national need in the market place. Join our growing network of industry stakeholders, fundraisers and investors. Increase your organization’s profile and gain access to a dynamic group of industry front runners. Learn more eBrochure | Prezi or contact us at casano@ncfacanada.org.