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Single-Purpose Vehicle Limited Partnership
Every time Brightspark invests in a new portfolio company, we create a Special Purpose Vehicle Limited Partnership Fund. Accredited investors in our network can invest in the fund, which in turn invests in a target company.
Fund: The fund invests capital in a portfolio company. In return, it owns securities (usually preferred shares) of the company. Every fund has a unique name corresponding to the name of the target company.
Company: The company in which the Brightspark fund will invest the capital. How Brightspark chooses target companies.
Limited Partners: The individual investors in the fund. Brightspark also invests in the fund, and is a Limited Partner of the fund.
Units in the Fund: Every dollar you invest gives you one unit of the fund, and your number of units determines the percentage of your ownership of the fund.
Securities: In exchange for capital, companies provide securities to the Fund. In our case, securities usually take the form of preferred shares in the company, and occasionally convertible debentures.
A small portion of a Limited Partner's investment is applied to fees:
A management fee (varies, but usually 1.5 to 2% per year for the first three years) goes to Brightspark and is used as compensation for sitting on sitting on boards of directors, due diligence, legal paperwork and overhead.
A one-time admin reserve fee (varies, but usually 2.5%-4% of the investment) covers external out-of-pocket fund expenses such as legal fees, tax and accounting costs.
When there is an exit, Brightspark first returns your contributed capital, and most of the returns are distributed amongst Limited Partners – a percentage (usually 15%) goes to Brightspark as a performance fee, or “carry”.
How to monetize your investment
As a Limited Partner, you make money when (and if) a company in your investment portfolio goes through a liquidation event.
Brightspark (pro-rata) returns 100% of the limited partners’ initial contribution first and then distributes 85% of the remaining distribution to them. The remaining 15% of profits go to Brightspark as "carry".
You should know that:
- usually, a liquidation event takes the form of an acquisition or an IPO
- the average time before a company exits is 5-7 years, but this varies
- there is currently no secondary market for Brightspark investments, making them illiquid
VC investments are very risky, and you could lose your entire investment. Read our detailed risk disclaimer
Paperless and automated on our secure platform
Step 1: Start the investment process
On the Opportunity page, select the “Ready to Invest” button.
Step 2: Submit your request
Select the existing investor profile that will make the investment, or create a new one.
- Enter your investment amount
- Confirm your accreditation
- Read and agree to the terms of the Limited Partnership Agreement
Step 3: Confirm your accreditation
Note: You only have to complete this questionnaire once.
If you haven’t already done so, complete a short questionnaire which will provide the information necessary for our team to confirm that you are an accredited investor and suitable for this investment.
Our investor relations team will follow-up with a phone call to confirm and/or clarify any of your answers, and ensure that this investment is suitable for you.
Step 4: Signing documents
Once your request to invest is approved, you will receive an email from DocuSign, with a link to review and sign the Subscription Agreement as well as the Non-Disclosure Agreement.
Step 5: Sending funds
You have the option to send funds:
- online via your bank, by adding Brightspark Capital Inc. as a recipient
- via a wire transfer
- by mailing a cheque
Don’t forget to log in and confirm that you have sent your funds.
Step 6: Completing the investment
We will send you an email to confirm that we have received your funds, and another email to confirm when the fund has closed.