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Pennies from Heaven

Some new angels have arrived in Saskatchewan. Angel investors, that is.

Valhalla Private Capital has picked up the pieces from the recently dissolved Saskatchewan Capital Network to give start-up entrepreneurs in the province a potential new source of much-needed capital and mentorship.

Randy Thompson, Calgary-based CEO of Valhalla, said with dozens of angels sprinkled across the other three Western Canadian provinces, it made sense to close the circle with Saskatchewan. “It has always been disappointing that Saskatchewan was our hole in the map. We’re very excited about linking all four of the provinces together,” he says.

Angel investors—also known as private or seed investors—are typically high-net-worth people who provide funding for smaller entrepreneurs, often start-up companies. They are often found among an entrepreneur’s friends and family.

Even though Valhalla is just getting its feet wet in Saskatchewan, Thompson says his group is already looking at a couple of potential deals. “I’m impressed with what I’ve seen in the ag tech space. I’ve seen a few software deals that I think have some legs,” he says. Thompson says he believes the two chapters in Regina and Saskatoon will have between 15 and 40 angels each.

Valhalla has more than 175 angels across Western Canada. It has invested as little as $10,000 in smaller enterprises all the way up to $2.5 million for bigger ones but it tends to invest an average of about $200,000. In exchange, the angels can receive shares in the company, royalties or interest payments, depending on the structure of the deal. “We believe that every company is investable so because of that, we’re relatively industry agnostic,” Thompson says.

“A lot of people think when you bring angels into town that they’re looking for the next Google or Shopify. Everybody wishes they would have invested in food companies, logistics and transportation, retail and energy companies. We believe those opportunities exist across the country and we’re going to be looking for those opportunities in Saskatchewan.”

Thompson says investors who had money before COVID-19 turned the world upside down in March probably still have it and are looking to invest it somewhere. “This kind of chaos creates opportunities,” he says. There are pockets of capital looking for a place to land. It doesn’t matter if it’s in good or bad times. Don’t forget, Microsoft was born out of the recession in the late 1980s. (A pandemic) can create resilience.”

Chapters usually meet face-to-face, but the pandemic has forced them to reconvene virtually instead. The advantage to monthly Zoom calls is that any angel from any chapter can hear about the opportunities a little further from home. “We’re getting 60 to 80 investors at each meeting and that’s creating its own energy. I can put together 12 investors from across Western Canada to do wind power, for example. You get a neat transition from everything being hyper-localized. Now we have a broader group of members,” he says.

Angels tend to feel very empathetic towards entrepreneurs because they’ve walked a few miles in their shoes and have gone through the same hardships that they’re experiencing. “They want these young entrepreneurs to be successful,” Thompson says. “Always ask an angel for their help before you ask for their money.”