Government Operations committee  Angel investment is all about equity, typically. There are angels that like convertible debentures. But any of the deals I've done as an angel investor, if I use myself specifically, have all been equity, typically not on the convertible debenture side. There are ways in which angel investors will go into certain investments depending on the risk, depending on the team, depending on the technology and the stage of innovation that it's at.

Government Operations committee  I think the bottom line is that you've got to understand the whole process by which procurement happens. As far as bundling goes, I agree that in certain cases where there is a large contract you could set up a system. I don't know how you would do it, but you could set up a system whereby a large company works with several small- or medium-sized enterprises to collectively bid on the contract.

Government Operations committee  I hope that answers your question.

Government Operations committee  Okay. The way a company approaches angels is at the local level. Our organization, as the National Angel Capital Organization, brings the network together. But when a company is outsourcing angel capital, they are doing it in their home town first. Then they would come to the National Angel Capital Organization if they needed either of two things: one, the angel who has made an investment in them wants to co-invest with others or they are looking for an increased amount of capital; or two, they want to spread the word about their business and want angel co-investment from across the country or from specific angel groups that have expertise in their area.

Government Operations committee  I think we're talking about apples and oranges here. Let me reiterate what the organization does. If we're talking about the National Angel Capital Organization, it's an organization that represents angels across the country. That doesn't mean the organization makes investments.

Government Operations committee  Let's talk about it in the context of a company that is going to be making a product or has services specific for the government, such as a software enterprise solution. Let's use that as an example. If a company has the Canadian government or an agency of the Canadian government as its first or second customer, that pays huge dividends to that company's then being able to go out and use that reference client to secure further clients, particularly in the international marketplace as opposed to a very small firm looking in their backyard.

Government Operations committee  [Inaudible--Editor]

Government Operations committee  I agree. We've had enough anecdotal conversations with some of our companies within the network to assume that the procurement process is long and complicated and that the bundling does inhibit smaller companies, particularly at the beta stage, or first customer, or “two or three customers in” stage.

Government Operations committee  It's nearly 500 individual angels.

Government Operations committee  It was 1,500 angels within groups represented; 2,000 members in total.

Government Operations committee  That's very interesting. It varies across the country and between groups and individually, so it's a little bit tricky in terms of measurement. We're actually working on some ways in which we can survey members at various points in time over the course of years and then start a map of that so we can trend it.

Government Operations committee  The average would be that about 10% are going to be out of the ballpark winners, and then you're going to have a number of companies, let's say another 30%, that are going to return two to five times.

Government Operations committee  I think it depends. If we're talking in the case of CICP, as an example, and the government is acting as a facilitator of introductions for a very specific reason, i.e., the procurement scenario that makes the pathway for one of my investments to get to that customer faster and actually secure a contract, that's a different scenario than the government getting into playing the role of investor.

Government Operations committee  I think the government needs be fiscally responsible with how those dollars are spent. If you have the right steward and you've identified the risks and you've been able to mitigate those, then from the perspective of an entrepreneur, and certainly from an investment perspective, we would be onside.

Government Operations committee  I have to be honest with you. I don't know enough about what OSME is doing at the regional level to be able to make that comment. I have heard from the members of the organization that they are not interfacing with OSME at the regional level very much at all. So my recommendation to you would be to consider if OSME is going to exist, how it can interface directly with people in the communities in which they're residing, such that they can be better advocates for those companies that are in the industry and wanting to do procurement.