BETA

Secondary Transactions

Buy the position of others, or sell your holdings in private VC companies – anytime and usually at a discount.
Why secondaries?


When investing in specific VC companies or funds, secondaries provide additional flexibility:

  • You can invest on your own time, without the timing constraints of traditional funding rounds 
  • You can access unique deals, and decide the price you want to pay; and
  • You have the option for liquidity before the average VC exit timeline (5 to 7 years)

Secondaries are not usually accessible in VC single-company investments, but we are broadening that in line with our mission to democratize the asset class.

Our proprietary back-office technology helps us process these transactions in a manner that is secure, seamless, and fair to all parties.

The benefits

BUYERS

  • Usually get a discount on the Fair Market Value
  • Invest at any time and outside of funding rounds
  • Differentiated timeline to potential liquidity
  • Access mature, later-stage companies
  • No fees to buy, management fees are not reset

SELLERS

  • Unprecedented option for early liquidity
  • Flexibility to sell some or all holdings
  • Rebalance your portfolio
  • Lock-in a profit
  • Process is seamless and secure
How it works

Buying secondaries



1. Browse what's available

Secondary opportunities are updated daily, so check back often!

2. Confirm your accreditation

Complete a simple questionnaire and discuss your investment profile with a member of our team.

3. Complete paperwork and send funds

Sign documents online and send funds using our secure platform that connects with your bank.

4. Holdings are transferred to you

Once your payment has cleared, the holdings belong to you and we'll record the transfer in your portfolio

You must meet the definition of an accredited investor to participate in any Brightspark investments, including secondaries. Our team will also work with you to assess whether you are suitable for any given investment based on your financial situation and investment goals.

Regular Brightspark VC opportunities happen when Brightspark decides to participate in a funding round of a specific company. Accredited investors can purchase units in a Limited Partnership fund that invests in that company. The fund’s target company receives the money, and issues shares to the fund – the investor becomes a Limited Partner of that fund.

Through the Brightspark secondary program, accredited investors can purchase the units of an existing Limited Partner. The seller of those units receives the money, and there are no new shares issued by the target company. The investor that buys the units becomes a Limited Partner of that fund.

No, the fact that units are for sale is not necessarily related to the performance of the fund’s target company, or its potential for a future exit.

There are many reasons why a seller may be interested in selling their units. It could be that their personal circumstances mean that they need to free up some cash. Or perhaps the valuation of the company has increased significantly enough that the investor can still make a healthy return. It is usually related to a need for liquidity by a seller.

When doing your due diligence, you will have access to the latest FMV and related documents to help you assess the value and potential of the fund’s target company. As it is the case with every VC investment, these are early-stage companies and involve high risk.

Most of the secondary units for sale are those of existing accredited investors in our network. Occasionally, some of the units have been warehoused by Brightspark (used to round up investment rounds, etc.)

Our investors set the price of the units they want to sell. They can choose to sell their units for more, or for less than what they originally paid for. We provide our investors with their investment’s “estimated Fair Market Value”, and our valuation guidelines are based on CVCA Guidelines  – and investors usually use this as a starting point and apply a discount to that value. 

Our team evaluates every request to sell, and will accept or reject based on our assessment of whether it represents a reasonable investment opportunity. Brightspark Financial uses the information just as you do to make these decisions. Please note that Brightspark Financial represents the buyer in secondary transactions. 

If you are looking to pay a specific price for units of any given Brightspark fund, you can let us know and we will notify you if and when units listed at this price become available.

We provide access to the documents that have been issued to existing Limited Partners of the fund, such as the original LPA (limited partner agreement) and the latest Quarterly Reports. Note that you will be required to sign a Non-Disclosure Agreement to get access to these documents. 

We also encourage investors to do their own research on the company’s performance – review the company’s website and press covering, third-party reports, press articles, and other publicly available information that can help you make an educated decision. 

While we try our best to ensure that both the buyer and seller of secondary units have sufficient information to make an educated decision, detailed information on the fund’s target company such as financials, projections, strategy, etc. is often not made available to investors; private companies are typically not required to disseminate such information.

We do not charge fees to buy secondary units, and management fees are not reset for the new investor. 

However, buyers should know that:

  • Brightspark reserved management fees at the time of the initial investment, and uses those fees over 3 years following that date. Any unused fees at the time of a secondary sale are automatically included in the price of the investment. 
  • At the time of exit, the new investor will have to pay carry on the full investment. To ensure fairness, the estimated FMV is net of carry. 
  • Brightspark Financial charges a 10% commission fee to the seller.

Yes, but a minimum purchase of 10,000 units is required.

Investing in venture capital, including buying secondaries, involves a high degree of risk. Early-stage investing in technology companies is a risky endeavour, and many early-stage companies fail (and investments are lost). Additional risks include changing economic conditions, difficulty in valuing startup investments, absence of liquidity, and more. We encourage you to read our complete risk disclosure.

Before investing with Brightspark, you should carefully review the risk factors. In addition, you should consult your own counsel, accountant and other advisors as to legal, tax, business, financial, and related aspects of an investment with Brightspark.

You can reach out to our team at invest@brightspark.com if you have any questions.

Please note that while our investor relations team is there to help answer your questions, they do not have access to any additional information than you do about the target company.

How it works

Selling secondaries



1. Request to sell

Tell us how many units you want to sell, and set your price and your discount

2. Wait for approval

Our team will review your submission. If accepted, we will post the listing on the secondaries opportunity page.

3. Confirm the sale

When a buyer requests to buy some or all of your holdings, you will get the chance to review and accept the offer.

4. Funds transferred

Proceeds from the transfer will be deposited directly into your bank account.

They are accredited investors, family offices and institutions who are looking to invest in VC offerings. Every investor goes through an accreditation and suitability check by Brightspark Financial. 

Sellers set their price at their discretion. We prepared a guide that can help you understand the value of your units and set an appropriate price.

Investors should not necessarily expect to sell their units at the current unrealized value – a discount is usually required, given illiquidity of the asset class. Generally speaking, lower asking prices with a discount (usually ranging from 15% to 30%, but this varies from fund to fund) will make it more likely to find a match with interested buyers.

Please note that we may deny your request to sell if the price you choose does not match our anticipated buyer interest.

The estimated Fair Market Value (FMV) of the units is Brightspark’s estimation of the unrealized value of these units. It is based on the FMV of the fund’s target company, which is determined using the CVCA’s valuation policies.This value is net of fees that have been paid to Brightspark, but includes any unused fees which will be transferred to the new unit owner. Because of this, if there hasn’t been a new financing since the original investment, it is possible that the estimated FMV is lower than the original price paid. 

Additionally, for the purpose of secondary selling, we subtract the carry that would be paid to estimate the most accurate value of an investment, since it represents the net amount that would be paid to the original unit owner if a liquidation event occurred today. When you buy units through a secondary transaction, you will be responsible for the full payment of carry should there be a liquidity event in the future.

It is clearly understood that the estimated value of investments may go down as well as up, especially in the case of a high-risk asset class such as early-stage companies. We would expect the unrealized value of most of these investments to change substantially in future years: some are likely to appreciate, and others to depreciate, and it is nearly impossible to predict. FMV can also fluctuate with exchange rates in cases where the investment in the target company was based on a foreign currency valuation (typically US dollars) while we report in Canadian dollars.

We charge a 10% commission on the final amount transacted. You should consider this amount when deciding on the price you want to charge for your units.

This commission helps finance our rigorous review process, servicing, legal and compliance overhead, marginal transaction costs, and our efforts to grow and improve the efficiency of our platform. This amount is automatically subtracted from the amount being paid back to you after a successful sale.

Yes, but a minimum of 10,000 units is required.

You can reach out to our team at invest@brightspark.com if you have any questions.

Please note that while our investor relations team is there to help answer your questions, they do not have access to any additional information than you do about the target company, and they cannot set a price for you.

Disclaimer: All the information contained in this page is provided to you for informational purposes only. Brightspark funds are available only to investors who qualify as accredited investors and for whom venture capital investments, which are risky investments, are suitable. Investing in venture capital funds involves significant risks. The terms of any specific investment in a Brightspark fund shall be governed by the constituent documents of such specific investment. This page is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities. The Brightspark Secondary Program does not guaranty the liquidity of such investments.