Practices and Patterns of Informal Investors

Descriptions of the Charts

Chart 1: Investors' Occupations

This horizontal bar graph provides a breakdown of the responses from when Canadian informal investors were asked to identify their full-time occupation. Proportionately, 17% respondents were retired, 12% were professional investors, 16% were managers, 10% were lawyers, 62% were entrepreneurs, 26% were consultants, and 8% were accountants.
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Chart 2: Frequency of Private Investments – Investment Patterns

This horizontal bar graph shows the frequency of investment patterns by Canadian private investors. 3% of investors reported never having invested, but expressed an interest; 11% reported not investing at that moment, but that they have in the past, 11% seldom invested, meaning less often than once every three years, 41% investors reported investing occasionally, meaning once every 2 to 3 years, and 34% investors reported investing often, meaning one or more per year.
[Back to Chart 2]

Chart 3: Investment Patterns: Sectorial Breakdowns

Chart 3 is a bar and line graph that represents the number of deals reported by investors for each sector, as well as the value of the reported deals in millions of dollars. Proportionately, respondents reported 31 deals in software, valued at approximately $5 million, 23 deals in finance and real estate, valued approximately at more than $23 million, 15 deals in manufacturing, valued approximately at more than $22 million, 10 deals in life sciences and biotech, valued approximately at $13 million, 10 deals in other technologies, valued at approximately $5 million, 8 deals in services, valued at approximately $5 million, and 20 deals in other technologies.
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Chart 4: Investment Patterns: Stages of Investment

Chart 4 is a horizontal bar graph that proportionately breaks down the stage of investment distributions of the 142 deals reported by investor respondents. 13% of the deals were invested in the turnaround stage, 47% for expansion, 45% for first stage, 64% for start-up, and 53% for seed stage.
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Chart 5: Investors' Expected Rates of Returns

Chart 5 is a horizontal bar graph that presents the distributions of private investor's rate of return expectations. Proportionately, 13% of investors expected less than a 20% return, 19% expected a return of between 20-29%, 33% expected a return of between 30-39%, 8% expected a return of between 40-49%, and 25% expected a return of more than 60%.
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Chart 6: Private Investors' Exit Expectations

Chart 6 is a horizontal bar graph that presents investors' expectations of exit times. Proportionately, 17% of investors expect an exit time of less than 3 years, 48% of investors expect 3-5 years, 24% expect 5-7 years, and 11% expect more than 7 years.
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Chart 7: Relative Importance of Potential Inhibitors to Investments

Chart 7 is a horizontal bar graph that averages the ratings given to various potential inhibiting factors. Investor respondents were asked to rate the importance of a variety of factors intrinsic to the local and national investment climates on a scale of 1 to 5, 1 being not at all important, 5 being of great importance. Securities regulations rated 2.83, lack of investment knowledge rated 2.98, post-investment time demands rated 3.21, lack of quality opportunities rated 3.26, directors' liability issues rated 3.27, entrepreneurs' lack of market knowledge rated 3.90, existing tax laws rated 4.00, unrealistic entrepreneurs' valuations rated 4.02, and unrealistic entrepreneurs' expectations rated 4.06.
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Chart 8: Factors that Encourage Private Investment

Chart 8 is a horizontal bar graph that averages the ratings given to various potential inhibiting factors. Investor respondents were asked to rate the importance of a variety of factors that encourage private investment on a scale of 1 to 5, 1 being not at all important, 5 being of great importance. More knowledge of investment process rated 2.4, limited partnership structures rated 2.6, formalize pool of capital rated 2.6, relaxation of securities regulations rated 2.7, tax-based limited partnerships rated 2.8, help with post-investment management rated 2.8, organized angel community rated 2.9, protection, director's liability rated 3.1, help with due diligence rated 3.1, syndication with other investors rated 3.1, independent evaluation rated 3.4, syndication with lead investors rated 3.4, more favourable tax treatment of capital gains rated 4.4.
[Back to Chart 8]