Angel investment in both Atlantic Canada and the country overall was distressingly weak in 2025, recent data shows, prompting calls for more capital to be channeled into early-stage startups.

The National Angel Capital Organization, or NACO, issued a paper last week saying that investors within its network deployed $113.8 million via 490 funding rounds in 2025. That amount of capital was down 22.1 percent from the previous year and marked the lowest level of angel investment in five years.

“The contraction is structural, not cyclical,” said the NACO report. “The 2025 figures describe the conditions that federal early-stage capital is intended to address: macroeconomic uncertainty, trade tensions, and tighter capital markets that disproportionately affected pre-seed and seed-stage activity in a year when Canadian founders most needed first cheques.”

What’s more, NACO found that the average angel cheque size declined to a five-year low. The average investment size per deal was about $232,000 in 2025, reflecting sustained capital constraint at the earliest stages of Canada's startup community.

See also: NACO and CVCA in $759M tug-of-war over federal funding. 

Closer to home, Entrevestor released its 2025 Atlantic Canada Startup Data Report, which showed that East Coast startups last year raised $15.9 million from angel investors. While that represented a 14 percent rebound from 2024, it was also the third year in a row that angel funding in Atlantic Canada fell below the $20 million mark.

NACO represents angel and early-stage investors from across Canada, including more than 4,000 individual investors.

Its latest research shows cumulative angel investment since 2010 has surpassed $1.92 billion. However, it has also identified a perennial shortfall in funding for early-stage companies in Canada, which it says amounts to about $1.6 billion over a five-year period. This shortfall in funding is preventing younger startups from reaching the growth stages needed to truly drive the innovation economy. 

NACO  also found that Northern Ontario has the strongest angel community in Canada on a per capita basis. The region recorded about 36 deals per million people in 2025, roughly 64 percent more than Southern Ontario, said NACO. In an interview, NACO Chief Executive Claudio Rojas attributed the success of the northern region to the strong and consistent support for angel investing by Federal Economic Development Agency for Northern Ontario, or FedNor.

NACO says that participation by women in angel networks reached its highest level on record in 2025. Women now represent 40 percent of members in the country’s angel networks – about 5 percentage points more than in 2024. Female representation has nearly tripled since 2017, says the group.

The organization called on governments to come up with policies, backed by funding, to encourage more private and public investment in early-stage, high-growth companies.

“Federal policy support is needed to expand the early-stage capital available to Canadian founders,” said NACO. “Closing the documented US$1.6 billion gap in Canadian early-stage capital will require matching mechanisms that pair federal capital with angel deployment, alongside continued federal support for the angel networks operating across every region of Canada.”