How it works: the investment structure

Every time Brightspark invests in a new portfolio company, we create a single purpose 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.

Fees: A small portion of a Limited Partner's investment is applied to fees. A management fee (4.5-6% spread over three years) goes to Brightspark and is used as compensation for sitting on sitting on boards of directors, due diligence, legal paperwork and overhead. An admin reserve fee (2.5%-4% of the investment) covers external out-of-pocket fund expenses such as legal fees, tax and accounting costs. Total is 8.5%.

How it works: Returns

When there is a liquidity event (the company is sold or has an IPO), the fund receives the proceeds of the exit, which is calculated based on its ownership in the company at that time.

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 goes to Brightspark as "carried interest".

Disclaimer: Exits can take a long time, usually 5-7 years. Investing in early-stage companies is very risky, and returns are not guaranteed. Learn more.

Frequently asked questions

Most of your investment is invested in the company. The rest is applied to fees:

  • Management fees (2% per year for the first 3 years): Goes to Brightspark as a compensation for sitting on Boards, due diligence, legal paperwork and overhead.
  • Admin Reserve (one-time 2.5%): Reserved for external/third-party out-of-pocket fund expenses (legal fees, tax and accounting costs).

Note: If a company is sold, 100% of your contributed capital will be returned to you first, including any fees you paid before any carry is applied.

Because Brightspark usually invests at an early-stage, portfolio companies will often raise additional funds in their lifetime - these are referred to as follow-on rounds

As a Limited Partner in the fund, you will have the opportunity to invest additional capital before any new investor if Brightspark participates in a follow-on round. That’s because when we initially negotiate the terms of the investment, Brightspark usually ensures that the fund has protective and preemptive protections to allow them to do so.

You can invest more if you choose, but are not obliged to do so. 

...investing directly in a company as an angel investor?
  • You will not own any direct equity/shares in the company. Rather, you will own units in a Limited Partnership Fund.
  • Your investment will benefit from venture capital terms, giving you preferred terms and protective provisions.
  • Your investment is professionally managed by venture capitalists. Brightspark usually take a board seat, and we dedicate significant time to ensure that the company–and your investment– grows to its maximum potential. Brightspark will work to maximize your investment.
  • There is no membership fee to join our network, and we never charge the company any fee.
  • We provide professionally crafted quarterly reports to investors.
...investing through an equity crowdfunding platform?
  • Brightspark investments are available to accredited investors only.
  • You will not own any direct equity/shares in the company. Rather, you will own units in a Limited Partnership Fund.
  • Your investment will benefit from venture capital terms, giving you preferred terms and protective provisions.
  • Your investment is professionally managed by venture capitalists. Brightspark usually take a board seat, and we dedicate our time to ensure that the company–and your investment– grows to its maximum potential. Brightspark will work to maximize your investment.
  • There is no membership fee to join our network, and we never charge the company.
  • We provide professionally crafted quarterly reports to investors.
...investing in a traditional VC fund?
  • Traditional VC funds are notoriously difficult to access for individual investors - and when they are, the investment minimum is usually very high. Brightspark is accessible to any Canadian accredited investor, and the investment minimum is much lower ($10,000).
  • Brightspark funds’ management fees and carry are lower than those of most traditional VC funds (on average, VC funds charge 2% every year for up to 10 years on committed capital, as well as 20-25% carry)
  • Unlike investing in a large VC Fund, the capital in the Brightspark Fund only goes to one company at a time. This means that you get to pick and choose which portfolio companies you want to invest in.
  • Returns are also different. When there is an exit event, Brightspark fund investors receive their profits right away. In traditional VC funds, returns are diluted in the larger Fund.

Keep up with Brightspark

Receive the latest news, and be the first to know when a new investment opportunity arises!

At this time, only those who qualify under the accredited investor exemption can view and participate in Brightspark investment opportunities.

In Canada, an accredited investor is defined as someone who meets one of the following criteria:

  • You, alone or together with a spouse, own financial assets worth more than $1 million before taxes but net of related liabilities
  • You, who alone or together with a spouse, have net assets of at least $5,000,000 net of related liabilities
  • Your net income before taxes exceeded $200,000 in both of the last two years, and you expect to maintain at least the same level of income this year
  • Your net income before taxes, combined with that of a spouse, exceeded $300,000 in both of the last two years and you expect to maintain at least the same level income this year
Read more, and contact your provincial Securities Commission or a lawyer if you are not sure.

By completing this form, you agree to receive email communications from Brightspark. We promise not to spam you, and you may unsubscribe at any time.