Funding organizations are eager to lend financial support for new and upcoming businesses, but many new entrepreneurs are unaware of the opportunities that are available to them. The Chronicle-Journal has visited some of these organizations and will spotlight their programs and initiatives in this series.
Entrepreneurs looking to start or grow their businesses have a variety of funding opportunities to tap into, including from civic agencies and government organizations.
Angel investing is one way to find support for a new business with access to funding and mentorship. An angel investor is typically a wealthy person who invests their own money into a company that is in the early stages of development.
Northern Ontario Angels, which will celebrate its 20th anniversary next year, is a non-profit investing network that was developed with the help of the Federal Economic Development Agency for Northern Ontario (Fednor).
Ian Lane, executive director of the Northern Ontario Angels, said their mandate is to pair high-growth business founders with accredited angels from across the region.
It begins by having two main stakeholders: the entrepreneurs who are looking for capital and capital seekers, called angels, who are seeking an investment.
“The connections between entrepreneurs and accredited investors have to meet criteria that are set out by the Ontario Securities Commission,” Lane said.
“Investors make an attestation online through our organization that they meet that criteria, and once we’ve paired them with an opportunity, they put their own money into companies.”
That money, Lane said, is the private capital that goes into the companies to help them grow.
“They also serve as a guide for the company to help them grow by transferring their expertise, mentorship, guidance and knowledge of challenges, and that’s where the terminology ‘angel’ comes from,” he said.
Lane noted the investors are typically high-net-worth individuals who are looking for ways to diversify their investment portfolio through successful business practices.
Northern Ontario Angels averages 40 deals a year, which is a 10 per cent success rate of the nearly 400 companies that seek their services to attract capital.
Outside of the investment component, investors who put their money into companies create jobs in their communities today and for future generations.
“There’s a community-building aspect to the Northern Ontario Angels that separates us from other angel groups in the province and we’re really proud of that,” Lane said. “We view ourselves as an economic development agency.”
He added the migration and the injection of those investments from angels into some of these companies is keeping people in the North.
“We’re even attracting companies from outside of the region to come to Northern Ontario because we have this rich network of investors that will take the risk and plunge into work with the companies to help them grow,” he said.
Businesses face challenges involving high interest rates and inflation.
“We were lucky our angels have participated and continue to do so, but it’s taken a little bit longer for them to write cheques for the companies because there are economic pressures that weren’t around a couple of years ago,” Lane pointed out.
“It sometimes takes a long time for the investment to come back to many of our investors but the reward is commensurate if the company succeeds. We like to see exits, where companies have been acquired and all of our angels get their money back and more.”
Lane called it a “bit of an intersection” between economic pressures and the timelines of some of their portfolio companies.
He said it’s critical to grow new businesses and develop them in Northwestern Ontario.
Excitement has been growing in the region, Lane said, with the province’s critical mineral strategy and investments that have been made in southern Ontario.
“I think our region is in a very exciting time and its access to capital is an important feature to help grow our region,” he said.
Lane said they will focus on attracting female entrepreneurs and founders because the “metrics are there to support that growth” with emphasis on equity, diversity, inclusion, access and reconciliation.
“It’s really important for us and we’re looking forward to harnessing some of the wealth that’s in the region and getting more people to participate from an investment standpoint into some of these great opportunities,” he said.
“By using our network and our partners in the region we can really showcase Northern Ontario, as a place to live and build your business.”
