From The National Post:
Mark Skapinker, raised in South Africa but a resident of Canada for more than three decades, is one of the veterans of the country’s venture capital industry.
A participant in many transactions over that period, Skapinker’s recent success came with the sale of a joint investment in New Brunswick-based Radian6 to Salesforce, an investment that produced a return of 2,700%. His initial success came as one of the original employee/owners at Delrina Corp., a software company formed in 1988 with about $1.5-million of capital and sold seven years later for US$415-million.
Following that sale, Skapinker formed other technology companies and became a venture capital investor/manager through funds geared to institutional investors.
Those funds (two are still active) are offered through Brightspark Ventures with the focus on early stage investments.
In 2014 Skapinker has a new approach. He is creating a series of investment funds that will limit themselves to one investment per fund. That is different from the normal approach where a venture fund will raise capital, typically from institutional investors and make a number of investments with the goal being able to harvest those investments in eight to 10 years.
Earlier this year, Skapinker closed his first such fund when $1.5-million was raised from 18 accredited retail investors to invest in Toronto-based Hubba, a brand management platform that “helps brands and retailers manage data for omni-channel commerce.”
Skapinker is now launching a second fund where the goal is to raise at least $1-million for Stage TEN, a Toronto-based company operating in the digital media area.
So why the new approach, one that is at work in the U.S. through the Funders Club? Skapinker said the change is related to the “huge interest from individuals to invest in good companies and use a manager to invest in good companies.”
The change was necessary, Skapinker said because “there’s little interest in investing in long-term venture capital,” partly because of the length of time the investment is tied up.
Now, via his new approach investors “are getting venture capital oversight into their investment. We negotiate the best possible deal, we ensure that their rights are taken care of, and monitor the company throughout the lifetime of the investment,” noted Skapinker, adding that Brightspark, the general partner, sits on the board of the investee company.
For an investor, one advantage is that they get to select which investments they want – though Skapinker advocates they have a portfolio of such investments. “They choose each individual investment rather than giving it to a fund manager who will make the investment,” he said, adding that as a fund manager, Brightspark collects a 15% carried interest (after the initial investment has been returned to investors ) plus a 1.5% annual management fee. But that fee only runs for three years. To participate, an investor has to meet the accredited investor rules and ante up at least $10,000. Much of the process occurs on Brightspark’s web site: accredited investors register and are then are advised of potential investments.
Skapinker’s approach is similar to what Optimize Capital Markets does. That firm, whose objective is to build the largest institutional crowdfunding marketplace in North America, does due diligence on investments and then posts them for its accredited investors. But Optimize is an agent — and not an investor — on the investments.
(Accredited investors, please refer to the Brightspark Online page)