North Forge Angel Network gets its wings

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This article was published 24/02/2021 (1155 days ago), so information in it may no longer be current.

Over the years, North Forge Technology Exchange has helped more than 200 companies get off the ground but it has never really had capacity to point its founders to a ready source of capital… until now.

More than 100 people attended the virtual launch on Wednesday afternoon to announce the creation of the North Forge Angel Network in collaboration with the National Angel Capital Organization (NACO).

NACO’s involvement includes educational programming that will make this angel network more inclusive and diverse than old-fashioned, old-boys angel networks.

Creating an angel investor network for the companies that are being supported by North Forge has long been the goal of its CEO, Joelle Foster.

“The access to capital issue has been going on for a long time in Manitoba,” Foster said. “I want to do this right. There are angels lined up. This is happening.”

Rather than an organic coming-together of enthusiastic high net worth individuals, Claudio Rojas, the CEO of NACO, said there is an understanding that potential angels need to be better informed about what is involved. As well, Foster said there is a need for broader inclusion to bring in investors who might otherwise have been structurally kept out of such activities and for entrepreneurs who don’t have their own ready-made networks.

“Our mission is to increase access to capital for entrepreneurs around the country, in all regions and for entrepreneurs from all backgrounds,” Rojas said.

North Forge has almost tripled the number of companies it is supporting over the past year. There are close 90 of them now, with about half of them at or near the stage where they have exhausted the funding from friends and family and need additional funding to get them to the next level.

For instance, Brett Carter and his team at Goodeye Technologies started the company just before the pandemic began and have basically worked the past year without a salary.

The company uses artificial intelligence-powered software to allow surveillance cameras and security systems to automatically monitor for suspicious activity.

“We are a war-time startup, you could say,” said Carter, meaning they had all the regular challenges of any startup plus they had to deal with uncertainties of the COVID-19 pandemic that were beyond their control.

“We might be able to do without raising significant capital for a while but it is a natural progression for this type of company that in order to grow we need a strong support system,” he said.

He credited North Forge as a huge help but said his company will need outside capital to keep growing.

“We don’t want to be one of those technology companies that has to move to Calgary for a few hundred dollars,” he said. “We want to build it where it started.”

The formal structure of the network and how the deals will be organized still needs to be finalized, but Foster said there are enough of the pieces in place that angels could start hearing pitches from North Forge companies as early as this May.

Foster and Rojas believe the fact that there has not been a successful track record of angel networks in the province in the past is due to a few factors.

“We need to make sure the business case is there so that it is sustainable. There is a lot of wealth in the province, There are family offices that command significant wealth but they have not had the opportunity to have full access to the innovation economy,” Rojas said.

For Foster, one of the important elements of the initiative for her is that it brings in people like new Canadians and women who have not traditionally been involved in this type of investment activity.

Among other things, NACO and North Forge are involved in efforts to expand the definition of what an “accredited” investor is.

Typically securities regulators require a certain threshold of wealth to make such investments.

“The problem is that means there are lot of people that are under-represented when it comes to investing,” Foster said, for instance, women and new Canadians who may not meet current criteria to be an investor.

“We don’t have a lot of angel investors because people don’t know what investing looks like for tech companies,” she said.

In collaborating with NACO, North Forge will be offering a robust educational experience through the NACO Academy.

“We would not do this unless there was some education behind it,” she said.

martin.cash@freepress.mb.ca