Angels Invest in Niagara
The following guest post was contributed by our node nGen and originally published in the Digital Buzz section of Business Link Niagara. It is posted here with permission.
“Access to capital is a signiﬁcant challenge facing entrepreneurs. Fortunately there are more options available than many people realize and we can talk to you about the options that might work for your business.”
I recently attended the Canada 3.0 Conference in Stratford, Ontario (along with Blake Landry and N’ora Kalb of nGen, Tobias Wiegand and the morro images team, Alex Golebiowski of PixelNauts and Tom Madej of FURI). Presented by CDMN, Canada 3.0 is Canada’s premier digital media forum bringing together industry leaders, researchers and students to discuss digital media in Canada.
In April’s Digital Buzz I talked about how proud nGen is to be a CDMN Node Partner, working together and sharing experiences to accelerate the growth of Canada’s digital economy. The roster of speakers and stream leaders at Canada 3.0 included representatives from industry, government and academia.
I was fortunate to have the opportunity to participate in a panel discussion on “Access to Capital.” The panel included both Canadian and US Commercialization leaders. We discussed proven models for commercializing ideas into business models, and the lessons learned from past successes and failures. For entrepreneurs, accessing capital is often the biggest challenge they face. Conventional lenders do not ﬁnance early stage companies because they are considered too high risk: unproven market acceptance, unproven cash ﬂows, and often thin capitalization.
However, in Ontario, we are extremely fortunate to have resources such as the ONE Network (Ontario Network of Excellence), a collaborative network of organizations designed to help innovative people commercialize their ideas. The Regional Innovation Centre (RIC) at nGen is a member of the ONE Network and can assist local businesses in emerging sectors by providing information and support on various business and project ﬁnancing programs.
One source of capital is often referred to as ‘angel ﬁnancing.’ Angel ﬁnancing is the term used when a single of group of investors pool capital to ﬁnance early stage businesses that may not otherwise be able to access conventional ﬁnancing. The ‘angel’ has the opportunity to invest early when enterprise valuations are low in order to maximize their return on investment. By forming a network, each individual angel’s risk is reduced by making smaller investments in many companies rather than risking it all on the success or failure of a single venture.
The Niagara Angel Network is a group of 39 angel investors—successful entrepreneurs, current and retired business professionals looking for personal investment opportunities in high-growth early stage companies. Members make their own investment decisions but collaborate on due diligence and combine their knowledge and expertise on making these investments. The Niagara Venture Forum links qualified entrepreneurs to these investhe founders of The Niagara Angel Network and the Niagara Venture Forum is Nick DiPietro, who is also working to strengthen Niagara’s economy as the Executive-in-Residence at the RIC.
One of the companies that received funding through the Niagara Angel Network is IIX Networx
(featured in the January edition of the Digital Buzz), a company that enhances the speed of accessing the Internet. The RIC helped to connect IIX Networx to the Niagara Angel Network, and helped IIX Networx prepare their presentation to the Angels. The RIC also provided IIX Networx with market intelligence services, detailed supply chain research, entrepreneurial training, access to service providers and advised them on their business plan and applications for funding programs.
The equity contribution from the Niagara Angel Network allowed IIX to proceed with the next phase of their expansion so they can bring their services and solution to a larger target market. Access to this type of funding can greatly accelerate a company’s ability to grow and capitalize on innovation before a technology becomes commonplace, or other competitors claim market-share.
Access to capital is a signiﬁcant challenge facing entrepreneurs. Fortunately there are more options available than many people realize and we can talk to you about the options that might work for your business. For more information on nGen’s programs and services please visit www.ngen-niagara.com.