The National Angel Organization was introduced at a meeting of angel investors in downtown Toronto today. The NAO developed from Angel Summit 2001 – a think tank “with the mission of helping participants to become better angels through network and idea exchange,” says Henry Vehovec president of the new organization.

NAO was formed to educate and network angels, and would be angel investors, as well as encourage, cultivate and make angel investment more efficient and effective, says Vehovec.

He says Canadian angels invest three times more money than the entire venture capital industry combined. “It is the key to growing small companies and essential to Ontario being leaders in innovation,” says Jim Flaherty, Ontario’s minister of enterprise, opportunity and innovation during a luncheon address to the angel investors gathered in Toronto.

The consensus among attendees was that there has been very little recent venture capital activity to develop small companies. They cite a continuing gap between angels and companies seeking venture capital.

There is also no means of tracking angel investment activity in Canada or the U.S., says Karen Grant, executive director the Toronto Venture Group which oversees the Toronto Angel Group. “It’s all based on anecdotal evidence, not empirical evidence. It’s not an exact science.”

Flaherty pledged government support for the NAO and told attendees that the importance of angel support could not be over emphasized. He called the NAO “part of the solution to innovation and productivity gaps.”