Wharton Alumni Angels Partnering with New Investor Network in Canada in Response to COVID-19

Wharton Alumni Angels is partnering with ArchAngel, a new network of investors in Kitchener-Waterloo, Canada, has launched an angel-stage fund to support Canada’s “high potential entrepreneurs and proven innovators.”

It is important to note that Canadian entrepreneurs have solid connections with the US market. “After successfully acquiring a few pilot customers and early-stage investments locally in Canada, Canadian Startups are set to scale up their businesses into the US market, then resources of business development and follow on investments from the US market become essential to the companies,” said Jacky Chen who also serves on the Investment Screening Committee of Wharton Alumni Angels. “Wharton Alumni Angels is excited about working more closely with the Canadian Startup ecosystem. The unparalleled competitive advantages of the Wharton Alumni network will tremendously benefit Canadian Startups to accelerate their businesses into the US market with the support of business advisory and capital investment support from our angels,” said John Braze, the co-founder and President of Wharton Alumni Angels.

The ArchAngel Network of Funds had been in the works prior to the onset of COVID-19, though the founders noted the decision to officially launch the fund is in response to the global pandemic with its pilot program “Covid-19 Leadership Initiative”. The group is a consortium of super-angels and venture capitalists from the Toronto-Waterloo ‘innovation corridor.’

The fund investments will invest in early-stage Canadian B2B innovation companion companies with disruptive technology and significant scale-up business potentials plus valuation advantages over the US market. The fund aims to drive returns for investors through active source deals within the Toronto-Waterloo Startup ecosystem. “The actively managed portfolio fund StarForge will help our portfolio companies to scale up their business in the US market with its alliance network in the US, like Wharton Alumni Angels,” said Jacky Chen, general partner at ArchAngel and angel investor with Golden Triangle Angel Network (GTAN), York Angel Investors, and Equation Angels.

ArchAngel was initially founded by a group of super-angels and entrepreneurs in Canada, which includes Benton Leong, Randall Howard, Ehsan Mirdamadi, and Jacky Chen. Co-founder Todd Bissett as a legal advisor.

The group is targeting a starting fund size of $10 million and already has significant commitments, including a strong GP commitment.

“Our model is to provide scarce seed capital and to optimize unleashing co-investment such that the total funding will be many times that,” ArchAngel said. “Because of the COVID-19 pandemic, we are compelled to act now which will be by using those initial commitments to unlock crucial investment in critical innovations urgently needed right now.”

Currently, the fund is looking to support companies that provide solutions for the “difficult economic and health challenges that this unprecedented situation presents to our local and global communities.”

ArchAngels noted that the idea around COVID-19 funding is to “augment” the efforts of the federal and provincial governments by providing additional capital, global partner networks, and expertise.

The launch of the angel-backed fund comes as the Business Development Bank of Canada (BDC) is exploring ways to provide matching investments to angel investors and angel-backed startups. The crown corporation recently launched the BDC Capital Bridge Financing Program for venture-backed companies.

The National Angel Capital Organization (NACO) has been in talks with BDC about extending the Bridge Financing Program to the angel community. Sources have indicated that NACO could potentially play a role in accrediting angel members and funds (such as ArchAngel, for example) that would then qualify for matching investment.

While ArchAngel is currently focusing on startups that can provide a COVID-19 response, in the future, it plans to support innovation “of all types” that could have social and economic impact.

As part of its launch announcement, ArchAngel noted that investors in its fund will “benefit from the fund’s general partners, their deep expertise, and the network of 200+ angel investors, VCs, and research institutes” that have been brought together for this angel network.