The Role of Angels in the Economy

What is the role of angel investing in the economy? If there is no capital, there is no company. It's as simple as that.
Without investment capital, there would be no new companies and no new jobs. Our economy would be in zero growth mode. This is based on a quote from Carl Furtado from the Golden Triangle Angel Network.
Small to medium size enterprises, referred to as SMEs, are defined as companies with fewer than 500 employees and they represent over 98% of companies in North America and Europe, employing over two-thirds of all workers.
A small fraction, around 4% of these SMEs, are high growth companies – called Gazelles, that create virtually all new jobs.
What is the connection between job creation and the entrepreneurial economy?

Virtually 100% of all new jobs in the last 30 years have come from new company creation. This is true of all developed countries. U.S. job data shows this particularly well. Angels play a critical role in the economy, investing in 27x more startups than venture capital investors.
The Golden Triangle Nework (GTAN) has an infographic that shows their group's investments alone have created over one thousand jobs since its inception in 2009.
Two major forces are affecting the angel asset class.
First, entrepreneurs need less capital than ever to prove their business models. Using agile lean techniques, they can achieve significant growth.
Next, the ability for angels to co-invest in syndicated deals has increased.
Successful angels often syndicate deals and co-invest with everyone across the investment ecosystem, including internationally with venture capitalists, angel funds, founders and government partners.
Some of the most attractive angel investment opportunities use technology-based barriers of entry to achieve competitive differentiation and high valuations.
While Canada invests heavily in scientific research and development, it is difficult to commercialize these techniques and bring them to market with solid business models.
Angels provide a vital bridge across the commercialization funding gap, filling the gap in the funding continuum between initial seed capital from friends and family– and the larger scale investments made by venture capital.
If funding is not available through this often lengthy interim development phase, many startups would fall into the Valley of Death, reducing the pipeline of businesses for later stage growth and development.
As summarized by Bryan Watson, former Executive Director of NACO, it was not that long ago that the majority of policy and support programs were designed primarily for supporting venture capital-backed companies. Angels, a collective of individuals, are a difficult entity to develop policy for.
The economic crisis of 2008, and crowding out of angel investors in the Canadian market coupled with increased sophistication of angel groups, allowed angels to communicate with all levels of government. This led to programs that angel-backed companies could leverage to cross the funding-gap, while also helping to offset the risk faced by angels. This is based on research from Cumming and Macintosh (2006).
The innovation funding gap continuum shows that angels fund companies to scale-up. The Valley of Death is in that chasm between seed and maturity. This is where individual angels, angel groups, angel syndicates, and funds, help smoothen the journey across the funding continuum for Canadian entrepreneurs.
Some provinces also give angel investors direct tax credits to incentivize investment into entrepreneurial companies, and help reduce the risk of the asset class to a level that incentivizes investment.