NACO reports a 27 percent increase in 38 angel investments in 2024.
Angel investment activity in Canada continued to recover from post-pandemic lows in 2024, according to a report from the National Angel Capital Organization (NACO). However, the organization argues that the government must do more to encourage early-stage investment.
The report said total angel investment in 2024 was $146.2 million, up 27 percent from the year before. Among associations reporting numbers in 2023 and 2024, total investment grew nearly 14 percent, thanks to 500 checks written.
Total angel investment in 2024 was up 27 percent from a year earlier.
Colin Mason, emeritus professor of entrepreneurship at the University of Glasgow, authored the report, which surveyed 38 Canadian angel investors. He warns that these figures “significantly underestimate” angel investment activity in Canada because they only include investments made by members of formal organizations and do not report other organizations.
Across all organizations, the average investment per company was $245,237, and the average hovered around $111,000, up from $84,000 in 2023.
To keep the talent and ambition of Canadian founders in Canada, “we must strengthen the infrastructure that allows this to happen: angel networks, pre-seed funds and ecosystem partners who provide mentorship and capital to help businesses scale,” Mary Long-Irvine, NACO board chair, said in a statement.
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Strengthening this infrastructure comes through increased federal support, NACO said. In his pre-budget presentationThe organization called for more money for early-stage investments and changes to tax structures.
Among its requests is a $450 million early-stage funding program complementing the Venture Capital Catalyst Initiative (VCCI), implemented through a government co-investment model with a focus on national defense and technology. It also recommends $200 million in operational funding for a new program that would support early-stage investment organizations such as angel groups and seed funds.
On the tax side, NACO is asking for a capital gains reinvestment deferral and a 30 per cent refundable national investment tax credit for investments in Canadian controlled venture capital (VC) funds or private placements.
At the NACO Summit earlier this year, NACO CEO Claudio Rojas told BetaKit that such a tax break would “require, from a fiduciary perspective, all asset managers to [innovation] asset class to the attention of its clients.” Rojas supported “bold leadership” from investors and builders, and participants told BetaKit that risk appetite in Canada needs to be increased.
Founded in 2002, NACO represents more than 4,000 angel investors and more than 100 member organizations. According to the report, membership in most associations costs more than $1,100 per year. Female angels make up about 35 percent of members, down slightly from the year before.
According to the report, the landscape of Canadian angel investing differs from traditional venture capital investments, which have fizzled out since maximums reached in 2021. In 2024, venture capital deals in Canada were at 2023 levels—slightly more than half of what they were in 2021—but the amount invested was maintained several mega dealsAccording to the Canadian Venture Capital and Private Equity Association (CVCA). In particular, pre-seed and seed financing deals fell sharply.
CVCA and NACO have agreed upon certain federal government requirements. Both associations sent a joint letter to Finance Minister Francois-Philippe Champagne is advocating for a unified strategy to ensure innovative companies have the funding they need to launch and grow in Canada. CVCA pushes for $1 billion extension of VCCI program, backed by advertising campaign This is LinkedIn.
Image courtesy of NACO.
