NBIF – FAN tour to take mystery out of angel investing

By Geof Bird – Telegraph Journal | link to original articl

First Angel Network, a Halifax-based organization that shares research information and pools investment capital, is touring New Brunswick in late October and early November with members of the New Brunswick Innovation Foundation to raise awareness about angel investing and to teach interested people how to make a well-informed angel investment.

“We want to come up and talk about angel investing and teach people how to do it the right way,” said Ross Finlay, co-founder of First Angel Network. “If they're going to do it and they make a mistake, it's with their own money.”

Angel investors typically provide funds for the in-between stage in a startup company's life, after initial seed money from friends and family but before larger chunks of cash are needed from venture capitalist organizations. Although sometimes risky, the investments can often be rewarding. According to the National Angel Capital Organization, a Toronto-based industry group, a successful angel investment typically comes with 27 per cent internal rate of return.

With a bit of coaching and proper due diligence, Finlay said, it's possibly to mitigate the risk inherent in an investment. To that end, the First Angel Network will hold breakfast sessions in Saint John, Fredericton, Moncton and Bathurst to educate people on how to make those better-informed decisions.

“We're looking for people that are high net worth individuals who like to invest at home,” Finlay said.

“With the recent sale of Radian6, everyone there made a whole pile of money,” Finlay said of the Fredericton-based firm that was sold off this summer in a deal worth more than $300 million. “That's the type of good news story that we hope will spur more angel investing in the province.”

According to the National Angel Capital Organization, angel investors are in short supply and high demand.

The organization reports that 17 per cent of small- to medium-sized enterprises are high-growth, but those few firms are responsible for most new jobs created in the country. According to an Industry Canada, companies with fewer than 100 employees are responsible for the bulk of jobs created. The National Angel Capital Organization says angel investors are the primary source of capital for these companies, making angels an integral part of job growth in the country.

“Generally, we find that people don't know enough about the ins and outs of how angel investing works,” said Bryan Watson, executive director of the organization. “We find it's useful for people to get a little context on what angel investing is.

“It's a high-contact sport that's better done as a group than individually,” he said, recommending people seek out organizations such as the First Angel Network to pool resources and knowledge.

“No one person has all the expertise to really do a dive into all the due diligence,” Watson said. “You don't have to go it alone.”

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Bathurst – Oct. 26
Moncton – Oct. 27
Saint John Nov. 15
Fredericton Nov. 16

Check FirstAngelNetwork.ca or NBIF.ca later this month for more details.