By Nick Stewart
A growing non-profit organization is seeking to soothe growing pains for product-driven entrepreneurs in the North by helping them to connect with interested investors.
Founded in November 2005, the Northern Ontario Enterprise Gateway (NOEG) seeks to connect burgeoning entrepreneurs with angel investors in the region, and works to serve both ends of the process. It provides entrepreneurs with information on how to access capital and how to properly prepare presentations to potential investors, while also working with the National Angel Organization to educate investors about the risks and rewards they face.
“Growth has to be financed somehow,” says Jim Noble, Regional Coordinator.
“Your growth may be so rapid that the bank will say that you have to obtain additional funds on your own before they’ll help you further. If you’re at the point where you’ve put in everything you have, this is where angel investors come in.”
Noble says through angel investors, entrepreneurs have access not only to equity capital, but also to experience and business advice, which can prove crucial as they move forward.
“Angel investing is not just about the money. If you’re an emerging company with a young staff, you don’t have that depth of expertise, and this is one way of getting that.”
Specific types of entrepreneurs are being targeted by the NOEG, particularly technologically-oriented ones, as they represent a group that Noble says is overlooked by typical investment groups as a result of a perceived risk or a lack of understanding.
“One of the barriers to those types of companies who are trying to grow or start up their business is that they can’t find investors in the North who are willing to invest, because they don’t understand them,” says Noble. “We’re trying to fill that gap to the extent that we can inform and encourage investors, because those types of businesses have a difficult time accessing the growth capital they need in the North, and when they go to the south, they’re an unknown story.”
The NOEG has recently completed the successful organization of angel investor groups in North Bay, Sudbury, Sault Ste. Marie and Thunder Bay, with each one featuring anywhere from five to fourteen members defined as being accredited individual investors by the Ontario Securities Commission. As the NOEG is still in its formative stages, with investor groups only recently established, a handful of candidates have been selected and the process has yet to play out in reality. Once both sets of parties have been properly educated and are confident enough to move on to a presentation phase entrepreneurs can then make a presentation to the investors.
While the investors are present as a group, there is leeway for independent partnerships, as individual investors can choose to move forward with an entrepreneur if a presentation grabbed their interest.
While it’s still too early for NOEG to claim any success stories, Noble touts the organization as an attempt to move the North towards more innovative and unconventional means of sparking the regional economy.
“The North is known for its mining and natural resources, and that’s great,” he says. “But NOEG is also about diversifying away from that towards a knowledge-based economy, and we’re trying to help that happen.”
