Connecting Startups to Angel Investors
September 21, 2017
Entrepreneurial activities are increasingly being recognized for significant job creation throughout Canada. In our city, more than 20,000 entrepreneurs fuel our economy through the wealth they generate, the talent they hire, and the innovative technologies and services they offer. Entrepreneurial companies are key to building our economy and attracting and retaining people.
London offers a strong support network led by leaders from small business, economic development, and the entrepreneur community across London and Southwestern Ontario. This network aims to strengthen our entrepreneurial climate and improve collaboration among service providers. Knowing what services and resources are available can affect entrepreneurship growth.
The London INC. portal - www.ledc.com/london-inc - was created by the London Economic Development Corporation (LEDC) to serve as a hub for all things entrepreneurial in the city. London INC. supports high-growth entrepreneurs to scale up, develop talent, raise capital, and create opportunities. Through this initiative, the LEDC aims to create an environment and community that fosters entrepreneurs and supports their success.
During the last year, London INC. has connected entrepreneurs with available spaces for incubation or expansion, organized major networking events to foster collaboration, and created programs for development and training opportunities. Several workshops and seminars have helped companies at various stages of growth find capital, talent, and support.
With access to capital being one of the biggest challenges entrepreneurs face and is vital to getting started on the right foot, the LEDC has created a formal partnered with the Southwestern Ontario Angel Group (SWO Angels) to better connect them with local, growing entrepreneurs.
The SWO Angels facilitates the introduction of entrepreneurs to potential investors to help them receive the funding they need to grow their business. If the LEDC is working with an entrepreneur that would meet the SWO Angel’s eligibility requirements for funding, we will connect that entrepreneur to the SWO Angel group.
Angel investors are established individuals or groups that provide capital for start-ups, often with an invested interest in economic development, financial growth, mentorship, and job creation in their local communities. How does it work? The funding process goes through seven stages:
- Self-Assessment - Determining whether or not Angel capital is right for your company, see above for eligibility requirements
- Online Application - SWO Angel’s business plan application extracts the most important details about your business, so their review committee can decide if your company should be invited for an initial screening, be referred to a partner for help in evolving the business plan, or be turned down as unlikely to receive funding
- Screening Meeting - If chosen for a screening be prepared to deliver a 30-minute investor presentation and answer questions posed by the group for an additional 15 minutes
- Presentation to Membership - If the screening is successful, you’ll be invited to present to SWO Angel’s full membership. You will have the opportunity to elaborate on your business plan - prepare for a 20 minute presentation and an additional 15 minutes for questions
- Due Diligence - Interested investors will verify the statements made in your business plan, presentation, and financial projections. If you play an active role in facilitating this process, it will help to expedite a final investment decision
- Term Sheet Negotiation - Interested Angel group members will present a term sheet that defines the structure of the investment deal, including the type of equity and board of directors representation, using industry standard terms, and provisions
- Funding & Beyond - When all parties are satisfied with the terms, the deal can be executed, but closing the deal is only the beginning of the Angel funding process. Now you have access to a network of value-added contacts and experienced professionals who can provide essential guidance for the growth and success of your venture.
With 21 active investors, focused primarily in the health and technology industries, the SWO Angels invested over $5,500,000 last year into eight companies, including Race Roster, Innovation Works, Textbooks for Change, and FreePoint Technologies Inc. These investments helped to attract an additional $9,399,000 in leveraged funding and support more than 45 new jobs.
The new partnership between the LEDC and SWO Angels will help provide more local entrepreneurs with the capital they need to grow. With the LEDC’s startup clients and the SWO Angel’s network of investors, it’s a perfect match to help support the increasing amount of entrepreneurial activity in London.
If you are an entrepreneur in London, Ontario and would like to learn more about how the LEDC can help get you connected to the SWO Angels, please contact us below.
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