To many, Angel Capital and Venture Capital are similar. To the entrepreneur accessing capital they are very different and complex. Gerard Buckley will attempt to give readers and participants an understanding of the differences in Canada and how to prepare CEO's and founders to understand which alternative may be best for your company.

1. S
“ Accessing Angel & Venture Capital in Canada ”
Experience.
Governance - Financial Management - Strategy
Integrity. Trust.

2. 2
Real World
Gerard Buckley
gerard@jaguarcapital.ca
@jaguarcapital
@gerardbuckley
Bus: 416-645-6695
Experience and Expertise
S Founder & CEO of Jaguar Capital an Advisory Practice for
Growth Companies in Governance, Financial Management
& Strategy
S Past - Chairperson of Board of Directors, Maple Leaf Angels
Corporation & founder and Lead Director for Maple Leaf
Angels Capital Corporation, the General Partner of
MLA48LP1 a Pre-Seed Angel Fund.
S Certified Corporate Director - The Institute of Corporate
Directors and Certified Management Consultant – Canadian
Association of Management Consultants
S Past member of Small & Medium Enterprise Committee of
The Ontario Securities Commission
S Investment Committee of Mount Saint Vincent University,
Halifax, NS
S 32 yr. Career with Scotia Capital as a Financial Risk
Management Advisor to Fortune 200 Companies: Rogers,
Irving Group, Empire Co., Four Seasons, Bruce Power, OPG,
Province of Ontario, Ford etc.

3. S What, Who, Why, When and How of
Angel Investing
S Selection Criteria
S Angel Network in Canada
S Canadian Angel Group Activity 2015
S Angel Resource Institute – Halo Report
2015
S Traditional Angel Network is changing
S Angel List is now in Canada
S Investment Process
S The Benefits for Entrepreneurs
S Venture Capital in Canada
S Canadian SME Market Trends
S Trends in Canadian Early Stage
Investment
S Parting Thoughts
S Q & A
Agenda

4. S Angel Investing is individuals investing their personal money in the equity or debt
of a Early or Growth Stage Company
S Often referred to as Smart Money, it is where individuals wish to invest their time
or experience as well money in a start-up company.
S People wishing to give back their experience so others may benefit which is often
referred to as mentoring or serving on a company Advisory Board or Board of
Directors
S Angel Investing is Active Investing not Passive
What is Angel Investing

5. S Angels are investors who leave out control. They essentially bundle Advice & Money
S A High Net Worth person prepared to invest their personal or family money
S A person who can add value to the company
S An accredited investor as defined by OSC 45-106
S A member of an angel network
S The majority of angel investment in Canada is completed by individuals >85%
S There at least 10,000 to 15,000 angels belong to over 300 groups in the USA.
S In Canada we have 1650 active angels in 32 groups.
Who is an Angel Investor

6. S Years investing 9
S Number of Investments 10
S Total Exits 2
S Years as a Entrepreneur 14.5
S Number of ventures founded 2.7
S Age 57
S Percent of net worth 10%
S Education Masters Degree
Profile of an Angel Investor - Median
Wiltbank Study 2007

7. S Qualified Opportunities
S Opportunity referral
S Increased Capital Diversification
S High Risk Asset Class …. Seeking High
Returns
S Favourable Valuation and Terms in
comparison to VCs
S Networking
S Portfolio company mentoring or
engagement
S Shared Due-Diligence
S Advisory Board and Board of Director
Roles
Why would someone be an Angel Investor

8. S Companies who are in seed and early stage.
S In technology, life sciences, ICT, health care devices, med tech, clean tech, power
solutions, fin tech, …..
S Solve a Problem, Secret Sauce or technology .......
S USP, validated business model
S Great management team
What Type of Companies do Angel Investors
Invest In

9. Equity Capital Life Cycle

10. S High anticipated growth rate –
Scalability
S Experienced management team
S Sustainable competitive advantage
S Barriers to entry ie. Exclusive IP
S Clear strategy for commercialization
S Proof of concept or enterprise level
validation
S Business model anchored in Reality
S Investor exit strategy in 5 to 8 years
S Investing in what you know – vertical
expertise
S Coach ability of the entrepreneur
S Amount of dilutive capital required
What Angels Look For

11. S More hours of due diligence positively related to greater returns (> 40 hours)
S Experienced former entrepreneurs as angel investors
S An angel investor's expertise in the industry of the venture being invested
S Angel Investors that interacted with their portfolio companies at least a couple of times per
month mentoring, coaching, providing leads and monitoring performance experienced
greater returns.
S Training, mentoring and coaching for new angel investors
S Portfolio investing
S Not withstanding there is no silver bullet to a successful outcome
Factors That Appear To Affect Investor Outcome

12. S Pre-seed Investments up to $100k
which usually includes family and
friends
S Seed investment should be from $250k
to $500K
S Early stage investments should be from
$350k to $1,500K
S Valuation 1.5 to 4.5 million
S The stage, quality of the management
team, valuation and technology of
companies are more important than
the sector criteria
S Quality is more important than
quantity
S In Canada 6% of companies get funded
(94% don’t)
S In Silicon Valley (1/300) get funded
Selection Criteria

13. S NACO – National Angel Capital Organization is
the National Industry Association
S Canadian Angel Groups range in size from 10
to 100 members
S 32 of 40 Angel Groups in Canada participated
in NACO’s 2015 Survey with 90% on
investment in their home province
S They have collectively 1650 investors a decline
of 2% from 2014
S 72% of groups established for five or more
years.
S 67% not-for-profit and 20% for profit
S Majority do volunteer shared due-diligence
S 13 Angel Groups in Ontario
S Keiretsu Forum, Roadhouse Capital, Golden
Horseshoe Venture Forum, etc. are Private
For Profit Angel Groups
S According to Invest Toronto, almost half (40%)
of the top 250 technology companies in
Canada are headquartered in Toronto which is
3rd only to Silicon Valley and New York in
North America.
Angel Networks in Canada

14. S 283 Investments in 2015 totaling $133.6mm
up from 237 investments and $90.5mm in
2014
S Average investment is $1.16mm, stabilizing
around 2014 figures & Median Value $635k
S Of over 1650 Cdn investors in Cdn angel
groups, 67% located in Central Cda, 28% West,
5% Eastern Cda. 79% of value of investments
made in Central Canada
S ICT (55%), Life Sci (8%), Clean Tech (5%)
S Follow on investment increased ‘15 over ‘14
S Equity Investments dominate at 96% with
Common Shares at 45%. Convertible
Debentures at 28% and Preferred at 23%
S 75% of transactions involve a co-investor. 57%
with other angel investors and 9% with
Venture Capital
S Valuation – Median $2.5m, Mean 3.3m
S Of 4,473 applications in Canada 6.3% get
funded by networks
S In 2015 there were 12 positive exits recorded.
6 were M&A, 2 IPOs and 4 were sales to new
or existing shareholders
Canadian Angel Group Activity - 2015

15. Angel Resource Institute – Halo Report 2015
S Median Angel Round Size trends up to $850k in 2015 from $510K in 2014. When
invested with others 1.6mm
S Pre-Money Valuations continue to climb at $4.6mm in 2015 a 53% increase from $3mm
in 2014; however, top valuations increased from $13.5mm to $23.5mm
S 70 to 80% of deals occur in angel groups’ home states
S 73% of Angel Deals are Syndicated or Co-Invested
S Only 20.9 % of angel deals are transacted in California
S Share of Deals by Sector - Software 33.9%(-), Commercial Services 8.7%(-), Healthcare
14.1%(+), Media 3.8%(-), Consumer Goods & Recreation 2.4%(-), Pharma & Biotech
7.3%(+)

16. S Currently Southern Ontario Angel
Investment community has 13 Angel
groups
S Government programs ( IAF, MaRS,
OCE, IBI)
S Online - Angel List, Syndicates, Funders
Club, The Funded, Gust
S Y Combinator, Tech Stars, 500 Start-ups,
+110 Accelerators in Canada ….
Consolidation occurring to access gov’t
funding
S Incubators & Accelerator funds
S Crowd funding such as kickstarter.com
and equity crowd funding
S Introduction of OM - Offering
Memorandum will have an impact
S Super Angels & Micro-VC’s
S “Future of Venture” – unbundling of
advice, money and control
Traditional Angel Network is Changing

17. S Angel List Canada announced as a Exempt Market Dealer by OSC on October 24
S Introduced to Ontario, Canada by Creative Destruction Lab and Next Canada (both related to UofT)
S A Online Portal for Accredited Investors
S AngelList USA raised $163mm from 3,379 investors on behalf of 441 start-up companies in 2015, up
56% over 2014
S There were 170 syndicates on AngelList in 2015
S 40% of the rounds were private and institutional money were in 40% of the deals
S AngelList also matches potential hires. In 2015 with 250,000 candidates 548,000 matches were
generated.
Angel List is now in Canada

18. What should you be doing to attract Capital

19. Investment Process
1. Pre-screening – Network Staff
2. Curbside Mentoring or Individual Member Mentoring
3. Present to Investment Review Committee
4. Present at members meeting
5. Due-diligence Committee is formed and led by a member
6. Term Sheet is negotiated & agreed between parties
7. Investment is papered by lawyer
8. Member is appointed to board
9. Quarterly company reporting

20. Investment Readiness Level
S Identify and Validate Metrics That Matter
S Validate Value Delivery
S Prototype High-Fidelity Min. Viable Product
S Validate Revenue Model
S Validate Product/Market Fit
S Prototype Low-Fidelity Min. Viable Product
S Problem/Solution Validation
S Market Size/Competitive Analysis
S Complete First-Pass Business Model Canvas
IRL 9
IRL8
IRL 7
IRL 6
IRL 5
IRL 4
IRL 3
IRL 2
IRL 1
Created By Steve Blank

21. S Large capital source
S Broad pool of Knowledge & Contacts
S Efficient Process
S Capital Connections
S In many provinces there is investor tax credit
S Leverage sources of funding (IAF, IBI, BDC etc.)
S Focus on value-add and advice, not the biggest cheque
Entrepreneur Benefits

22. Entrepreneur Tips
S Find your lead investor early
S Investors don’t have to be in tech
S Have a good business plan and executive summary – Most investors tend to think
of start-ups without a plan as expensive hobbies
S Most Decks Suck – Make yours Good
S Set a deadline
S Develop a Funding Strategy
S Put money in yourself, it goes a long way

23. Super Hero of The Modern Start-up World

24. Venture Capital Investment Activity in Canada
S Cdn VC’s invested record high $1.5b (255) in H1‘16 is up from $1.1b (272) in H1’15. Ave. deal size has grown to $6.1
mm up from an ave. range of $4mm in 2015.
S Regional breakdown for H1 is Ont 44%, BC 19%, Prairies 6%, Quebec 28% and Atlantic is 4%. In 2015 Ontario
accounted for 38% of deals and 42% of disbursements. Quebec represented 31% of disbursements for the same
period.
S Information and Communications Technology (ICT) 67% is driving most of the growth followed by Health and Life
Sciences 20% and Clean Tech 7%.
S VC investment was up in 2015 with 536 deals for 2.3b an increase of 24% and 12% respectfully over 2014
S In 2015 there has been a shift by VC’s towards earlier stage deals (seed stage up 30% to 178 deals) at the expense of
later stage deals which is down 12% in volume and 23% in amount invested.
S Exits were also up in 2015 reaching a record 4.3b compared with 1.5 b in 2014 and 1.3b in 2013
S Of 1.5b invested in H1’16 644mm came from public pension plans and 534mm from government sponsored funds

25. Venture Capital Investment
S For entrepreneurs, choosing the best financing model for their start-up isn’t a
luxury – it is a necessity
S The terms you will be offered will be commensurate with the value you have
created. Sales = Higher Valuation
S VC’s money comes from LP’s which is mostly institutional
S Some VC firms walk and talk like groups on angels. See seed financing in the #’s.

26. Venture Capital Pros
S Small piece of a big company is better than a large piece of a small company
S Their goal is to grow the company quickly and exit.
S Deep pockets for follow on financing
S Allows you to focus on the business rather than constantly raising $
S VC firm name helps & signaling positive
S It is their FT Job to help you succeed
S Industry expertise

27. Venture Capital Cons
S You have to qualify
S Often looking for exit in short time frame
S Negotiations tend to be one sided
S Legal costs of documentation are high
S Equity has a higher cost than debt +30%
S Staff & time commitment for due-
diligence
S Reduced control or determination of
business
S VC’s ask for and get better terms than
Angels
S Your business is exposed to the VC’s
funding cycle and market uncertainties
S One author referred to VC’s as a last
resort
S May control board decisions
S Follow on Financing requires higher
valuations to support VC’s valuation
S Funding is down and VC’s are taking less
risk.
S Series A crunch

28. Pitfalls
S Complex covenants based on performance metrics
S Inordinately thick documents
S May replace management
S Liquidation preference
S Anti-dilution clauses
S Loose control of the direction of your company
S May hold veto rights or rights to sell company
S Signaling effect (VC in seed round & passes next round)

29. S Where does your deal flow come from?
S Do you charge for presentations? Or
charge for due-diligence? Or
Performance Fees?
S How much management Fee do you
charge? How much interest carry do
you charge investors?
S How often do you hold pitches?
S Do you help prepare pitches?
S Do you invest together or make a
investment decision separately?
S Do you have a fund or make pre-seed
investments?
S Do you disclose your investment
process?
S Who will your board nominee be?
Questions Entrepreneurs Should Ask Angels or
Venture Capitalists

30. Canadian SME Market Trends
S Nation of independent contractors
S The state of employment is
changing dramatically
S Canada is an Immigrant Nation
S Productivity in Canada has not
improved
S USA advantage is the development
of their risk Capital Markets
S Cost of start-up in CDA is less that
USA (especially Silicon Valley)
S Seed and Pre-seed level is where VC
money is going
S Consolidation of Accelerators and
Incubators
S Angel Tax Credit provincially and is
being lobbied federally
S Valuations for public companies are
high and is effecting private markets
S Less exits

31. Trends in Canadian Early Stage Investment
S There is a lot of attention being paid to Fin Tech especially in Toronto
S Medical Technology has always and still is a focus of MaRS Innovation
S Gaming has received a lot of attention in the entertainment space through Digital Media Fund and conferences
such as Game on in Canada
S Social Media applications are tougher due to freemium business models that are tough to validate
S The collaborative or shared economy gets attention where the company has got traction, validated a product
market fit and acquired customers such as Dozr, Waterloo and Share The Bus, Montreal
S The auto industry is blistering hot in USA; however, large capital is required when we are speaking about such
technologies as Autonomous Vehicles. Notwithstanding cities like Stratford are making themselves available for
testing sites of such vehicles. To date no applications filed
S Accelerators such as MaRS, Highline, Next Canada & Creative Destruction Lab in Toronto, Communitech in
Waterloo and Founders Fuel in Montreal are getting a lot of attention.

32. Do It Your Way –Parting Thoughts
S Over 90% of all businesses are started and grown with no equity financing
S VC is the OPM (Other Peoples Money) drug of Start-ups
S Oct’13 Profit Hot 50 - Seed Financing – 98% Founders own capital, Growth Capital –
62% Founders own Capital
S Control your destiny until you create sales
S Eyes Wide Open and be well researched
S Send me a email and I will send you a recommended Due Diligence Checklist
and/or a Sample One Page Executive Summary

33. Mission
To be a Trusted Advisor and Visible
Expert to Companies for our Core
Competencies
Culture
Experience
Integrity
Trust
Vision
To Grow a Canadian Based
Internationally Comprehensive
Advisory Practise Focused on
Growth Companies
Who is Jaguar Capital
Target Companies
Growth Companies Where our
Consultants Add Value

34. Focused Industries
Energy, Digital Media
Technology, Healthcare
Manufacturing
Financial Services
Specialize In
Forming Advisory Boards
Board of Director Consultation
Raising Alternative Financing
Pre-Revenue Valuation
Focus On
Governance
Financial Management
Strategy
What Jaguar Capital Does
How We Do It
Advisory
Management Consulting
Interim Executive

35. 1. We HELP Companies get Financed
2. We HELP Companies Increase Investors Confidence in their Investment
3. We HELP Companies Grow
4. We HELP Companies with Strategic Direction
5. We HELP Companies Manage Financial Risk
6. We Get a Company Positioned for IPO
7. We HELP Companies with Dysfunctional Boards of Directors, Advisors &
Disruptive Directors
Benefits of Working with Jaguar Capital

36. “1/3 of all SME’s in Canada had
problems accessing additional
financing, let Jaguar Capital help you
attain the financing you deserve”
– Gerard Buckley
gerard@jaguarcapital.ca