Transcript Softech 2000 NEWEST.ppt

Angel Investor Summit, 2001
Overview of Venture & Angel Investor Market
John Eckert
Managing Partner
McLean Watson Capital
Toronto, October 2001
Overview
Institutional VC market in Canada
What we know (& don’t know) about Canadian
angels
Panel discussion on issues facing angel
investors today
John F. Eckert
Co-founder & Managing Partner, McLean Watson
Capital
President, Canadian Venture Capital Association
Chairman, Capital Markets Committee of
Canadian E-business Opportunities Roundtable
Pool of Capital Growing
Capital Under Management by Investor Type* - Canada
$ Amount in Millions
$18,875
20000
18000
16000
14000
12000
10000
8000
C
$12,135
G
$10,071
HY
$8,408
IN
$7,097
LS
6000
4000
2000
0
PI
1997
1998
Source: Macdonald & Associates Limited
1999
2000
2001
* As of beginning of year
Capital Invested in Central Canada
Capital Under Management by Province
1% 5% 2%
1%
1%
BC
AB
SK
MB
48%
ON
42%
QC
ATL
2001 - $18,875M
Source: Macdonald & Associates Limited
Canadian VC Disbursements Still Strong
Quarterly Investment Activity
500
# Financings
$ Invested (Millions)
428
400
$3,000
$2,500
369
300
296
240
200
$2,875
227
$1,500
$1,000
100
0
294
231
222
$2,000
330
314
$612
$610
$471
Q1
Q2
Q3
$1,027
$1,151
$1,205
$1,088
Q4
Q1
Q2
Q3
1999
$1,119
Q4
2000
# Financings
Source: Macdonald & Associates Limited
$ Invested (Millions)
$1,381
Q1
Q2
2001
$500
$0
U.S. Industry Moved Back to 1999 Levels
Quarterly Investment Activity
2000
# Financings
$ Invested (Millions)
1751
1863
1790
1609
1500
1201
$25
1495
$20
1317
1072
1000
874
$25
$27
$29
$27
982
$20
500
0
$12
$13
$14
Q1
Q2
Q3
$30
Q4
Q1
1999
Q2
Q3
Q4
2000
# Financings
Source: Macdonald & Associates Limited
$ Invested (Millions)
$15
$10
$12
$11
Q1
Q2
2001
$5
$0
More Capital Going to Follow-Ons
New vs. Follow-On Activity - Canada
$6.3B
7000
6000
$5.0B
5000
Follow-on
4000
$2.7B
3000
$1.8B
2000
1000
0
$0.7B
1995
New
$1.7B
$1.1B
1996
1997
1998
1999
2000
2001*
Source: Macdonald & Associates Limited
* Annualized Based on 1st Six Months
New Deals Harder To Do
New vs. Follow-On Investments - Canada
1600
1,441
1400
1,074
1200
931
1000
800
600
1,042
989
Follow-on
632
New
465
400
200
0
1995
1996
1997
1998
1999
2000
2001*
Source: Macdonald & Associates Limited
* Annualized Based on 1st Six Months
Breakdown of Capital Sources
Big Players in Canada
14%
9%
3%
C
21%
10%
5%
G
IN
23%
24%
13%
LS
PI
FI
OT
15%
12%
2000 - $6,319M
Source: Macdonald & Associates Limited
10%
30%
11%
Q2, 2001 - $2,500M
What We Know About Canadian Angels
Scant data available about size & nature
VCs supply data to Macdonald & Assoc;
angels wealthy individuals - low profile
Carleton University Professor Allan Riding
estimates angels invest $1- 5B per year
About half the $6.3B deployed by VCs in 2001
Same Market – Different Focus
Angels & VCs both invest in young, high growth
companies in IT & life sciences
Angels focus on early stage – seed financing, start-ups
Institutions increasing seed & start-up activity (45% of
disbursements in 2000), activity across spectrum
Average angel investment approx. $100,000 (Riding, 2001)
Average VC investment in 2000 - $2.5M, 2% in deals less
than $500,000
Angels & VCs – Where They Meet
Angels & VCs complement each other. Both bring resources –
along with value-added management, expertise & networks
Angels also intersecting with VCs by:
1.
Participating in large investor syndicates;
2.
Forming institutional pools (Celtic House) & informal organizations
(Band of Scoundrels);
3.
Committing resources to VC LPs.
In 2000, 13% of VC disbursements came from “other” investors
outside industry – significant fraction from angels
Angel/VC interaction important in key centres (Ottawa Valley)
Angel Investor Summit, 2001
Overview of Venture & Angel Investor Market
Toronto, October 2001