Depending on whether there's going to be a follow-on VC round, in which angels are typically diluted, you're looking at probably something in the neighbourhood of between 20% and 30%, because we want to keep entrepreneurs motivated to show up. Over the last ten years that I have been involved in angel investing, there have been too many times when I've had entrepreneurs come to me and say “Look, I just need another $200,000 to get me over the next tranche. The problem is I've raised $1 million in $100,000 tranches, and I'm now down to 7% ownership of my company.” At that point I've turned to individuals like these and asked why they bother showing up. There's nothing in it for them.
Besides, one of the things that angels do, one of the characteristics of angels, is that they not only provide early-stage financing--and they're about the only people who are doing that right now in this country in any volume--but they also mentor companies, because most are serial entrepreneurs who have built successful businesses. Sometimes, the more you get outside of large cities like Ottawa, Toronto, Montreal, Calgary, or whatever, you find that there's an added component to it.
I spent a lot of time this year in places like Thunder Bay, North Bay, and the Soo. Angel investors, of course, want to make money, but they also have a real desire to give back to the community. That may sound a little like motherhood, but it is really part and parcel of the role that angels are playing. What we really have to do--which is why this year alone, the National Angel Organization will build ten new angel groups in Ontario alone--is provide discipline around investing and have term sheets that make sense and exit strategies that people can all adopt and feel good about to keep these entrepreneurs alive so they can go on to the next stage of investing. Without angel investors they never get to the VC landscape.
That's a very long answer, but it's so fantastic.