How many Angels can dance on the head of a pin? Ice Angels Uniting in Canada
Instead of trying to answer the Aquinas like epistemological question of how many angels fit on the head of a pin, this post is about the changes that are occurring in the Canadian angel community for high-tech startup funding.
For a community of angel investors to be effective, there needs to be a density of intensity that creates, attracts and supports healthy deal flow and investment activity. This density of intensity acts like a vacuum drawing entrepreneurial talent, mentorship, other investors and VCs providing a series of experiences and market data on what is working. We see which deals & people attached to deals are worth re-investing in and it helps create the proper farm system for later stage investing and success.
Done right it creates a system that achieves escape velocity and can continue with its own momentum giving birth to many high tech success stories, that in turn feed talent, capital and mentors back into the community.
Historically there have been a lot of problems with the various attempts to organize the angel community in Canada.
While not the only example, a visible sign of these problems was the Toronto Angel Group and Toronto Venture Group suspending operations. I only had cursory run-ins with these groups, but I know from many other angel investors and entrepreneur friends that these organizations failed to galvanize the community and service either the angel or entrepreneur communities effectively (despite a lot of volunteer effort by many people I respect and consider friends).
A healthy angel community that provides such a farm system for venture investors is becoming even more critical in todays market where rapid development and the lower cost of building web applications puts most deals below the venture capital radar.