How to Get Involved in Investing in Saskatchewan Tech
I don’t know if you’ve heard, but the Saskatchewan tech scene is booming! In fact, our innovation and tech ecosystem have earned us the nickname ‘Silicon Prairie’.
There are lots of reasons for us Saskatchewanians to get in on this success, not least because our province has a 45% tax benefit for Saskatchewan residents who invest in eligible tech companies.
Want to know how to get involved? Read on!
“Before we dive in too deep, it’s important to mention I’m not an investment or financial expert. Also, I have invested in several Saskatchewan tech companies through Startup TNT. Investing in tech is risky but many people do it because it can also have great returns. Consult with your financial advisor. ”
The technology industry has its own investment pathways. Often, the costs of starting a tech company outpace the revenue it generates, so many tech startups need investment to grow and get off the ground. The investment path generally starts with a friends and family round, moves into investment from Angel investors, and then, if the tech company grows, it may be eligible for venture capital investment.
Investing in the Friends and Family Round
If you know someone starting a tech company, you can ask them if they need investment. Please note, this stage can be very risky but you can also get the best deals on the investment. Sometimes this looks like loans or shares, and the startup should provide the legal documentation to make this happen.
You can also reach out to accelerators like Co.Labs and Cultivator to see if any companies could use extra funds to get through this investment process.
What is Angel Investing?
An angel investor provides capital to a startup, sometimes as a one-time cash infusion and sometimes in regular payments. This is normally done to shore up an idea or innovation the investor supports, with the expectation they will only see returns if the company does well.
How to Become an Angel Investor
First of all, you need to qualify financially. You can reach out to Innovation Saskatchewan or your financial advisor to see if this is a fit for your financial situation. There are great groups like Startup TNT that can help to get you started while also providing training on vetting companies and deals.
You also get to work with a group of other investors so if you aren't feeling confident—this will help you to learn.
What is a Venture Capitalist?
Venture Capitalists invest in private companies that have shown high growth potential or have demonstrated high growth. This form of investment is often provided for startups, early-stage and emerging companies.
How to Invest in Venture Capital
Well, it's a specialized financial field but you can invest in larger funds that invest in technology projects. Local groups like the Golden Opportunities Fund and Conexus Venture Capital in Regina are great places to reach out for information about how to get involved in these types of funds.
The very best way to understand the tech investment space is to get involved in industry events. Most pitch competitions and social hours are open to the public and they are a great way to learn about companies that align with your investing plans.
Happy investing!