First Angel Network is shutting down after 14 years of channeling the money of wealthy investors into Atlantic Canadian startups.
As first reported by Betakit, Co-Founders Ross Finlay and Brian Lowe notified their friends and contacts on Friday that the investment group would cease operations on March 31. The move comes a little more than a year after one of its portfolio companies launched a lawsuit against FAN and others. Though Lowe and Finlay believe the suit is no longer active, they admit that the case had an impact on the group.
“Our board felt it was time,” said Lowe in an interview on Sunday. “Our contract with ACOA [the Atlantic Canada Opportunities Agency] ended last June 30, and now . . . we would like to see other angel groups grow up in the Atlantic region.”
FAN was a trailblazing organization in that Finlay and Lowe were raising awareness about angel investing early in the century, before most Atlantic Canadians had ever heard of angels or startups. One of their first investments was with drug discovery company Immunovaccine Technologies, now IMV Inc., a publicly listed company with a market value of $241 million.
The angel group was known for choosing one company each quarter to present to FAN members in the hopes of receiving backing. It brought together 200 individuals who invested more than $16 million in 40 companies. FAN said these companies have created 400 jobs.
The group was no stranger to controversy. In 2012, Lowe and Finlay came under hash criticism for charging companies to pitch to the organization – a practice they soon did away with. Despite the controversy, FAN in the past few years attracted some of its strongest investments, including Metamaterial Technologies Inc. and Spring Loaded Technology.
Beyond Food Raises $1M To Help End Food Waste
Then early last year, Fredericton-based KnowCharge launched a law suit against FAN, Finlay, New Brunswick Innovation Foundation and two former NBIF officers. FAN and NBIF were investors in KnowCharge, which sought damages for actions it said adversely impacted the company.
Neither FAN nor NBIF have commented on the case for several months, though Finlay said Sunday he now believes there is no longer any litigation open against either of the funding bodies or their officers. He plans to meet with his lawyers this week to confirm that the case is over.
When the case was filed, Finlay and Lowe asked FAN members to contribute to a defence fund, which they did. Finlay and Lowe said they felt they could not then ask FAN backers to buy new memberships in 2018, so for the past several months FAN has not had a membership base.
Finlay and Lowe intend to remain active in the angel community. Lowe is now a Co-Founder of the recently formed company Beyond Food, which plans to produce nutritional supplements from excess produce from grocery stores. He says his passion is life sciences and medical technology companies, and he intends to continue to engage with these ventures.
Finlay is the Vice-Chair of the Angel Resources Institute of Boca Raton, Fla., and will continue his work with angel education.
Though they know of no new angel groups springing up in the region, Finlay and Lowe hope at least one group will emerge to help investors find, back and mentor high-growth companies.
“There’s always a demand for capital,” said Finlay. “I hope we see many angel groups forming in Atlantic Canada right now.”