People cross an intersection in Toronto's financial district.Adetona Omokanye/The Globe and Mail
Early-stage financing by angel investors in Canada reached a five-year low in 2025, according to a new report, as investors sit on the sidelines due to economic and trade concerns and advocacy groups lobby for more federal support.
The report from the National Angel Capital Organization says that more than $113-million of angel financing was invested across 490 deals in 2025, a decline from 613 deals worth a total of just more than $146-million in the prior year. This represents a decrease of 22 per cent in money invested and 20 per cent in deal count year over year.
Angel investing is one of the earliest stages of financing for young companies. NACO says angel investors are typically accredited individuals who put money into an early-stage startup in exchange for a stake in the company.
Angel investments in Canada have steadily declined since a peak of more than $262-million in 2021. Total capital deployed in 2025 is almost 57-per-cent lower.
The report blames trade tensions and tight capital markets for the decline.
NACO’s findings follow the release of a report from the Canadian Venture Capital and Private Equity Association last week, which found that in the first quarter of 2026, new venture capital investment had fallen to near zero for growth-stage companies. Growth stage is a later step in a company’s development.
Various industry associations are trying to stake out a claim to a $750-million investment announced in the 2025 federal budget.
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The government said the program will be part of a national strategy to “support Canadian firms facing early growth-stage funding gaps.”
The budget didn’t provide details on how the money will be allocated, but NACO would like to see the financing support early-stage companies. In a white paper released in March, the organization called for $500-million to go directly to these companies through a two-to-one ratio where every $2 invested by a private company would be matched by a $1 government investment.
Their proposal calls for the remaining $250-million to be invested into angel “operational infrastructure,” including networks and early-stage investment funds, which it says will help facilitate investment in early-stage companies.
In February, the CVCA released a competing proposal, which calls for the money to be directed toward the development of late-stage companies.
In an interview, angel investor and founder of the Canadian Startup Capital Association Jesse Wiebe said his understanding was that the money was never meant for early-stage companies, it was intended to fill funding gaps in later stages.
“It is abundantly evident that those gaps exist when you look at the most recent CVCA report,” he added.
NACO, though, says that investing in early-stage companies will lead to better outcomes down the line.
In a statement, NACO chief executive officer Claudio Rojas said, “Canada needs to take more shots on goal. If we want more Canadian anchor companies, we have to fund the early-stages of the pipeline. By taking more shots on goal today, we will have more global champions moving through the capital continuum.”
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The NACO report also showed a continuing trend of wide regional disparities in funding allocation. In 2025, Ontario and Quebec alone accounted for 76 per cent of deals and 75 per cent of total capital deployed.
Northern Ontario recorded the highest per-capita rate of deals in the country with a total of 28 deals, or 25.9 deals per one million people. The next largest was Southern Ontario, at 291 deals or 21.9 per one million people.
The organization said this was because of strong angel networks in northern Ontario that are effective at connecting startups with investors and strong federal financial supports in the region.
The report says replicating this model in other regions would lead to an uptick in investment.
Atlantic Canada had the lowest number of deals, with 27 financings accounting for a total of just more than $5-million, or 10.6 deals per one million people.