Toronto-based Brightspark Ventures has just announced the closing of $6 million in financing, which the company says will be put towards expanding the 18-year old firm’s reach across Canada and to furthering its own “democratic” approach to VC dealmaking in the tech sector.
The high stakes and high risk (and potentially high reward) world of venture capital is not for everyone, literally, as governments, in the name of investor security, allow only accredited investors such as banks, investment firms and those with high-net- worth to play the VC market. Thus, when a company says that it’s turning over the traditional model by “democratizing venture capital,” some could be forgiven for being a little skeptical.
All is relative, however, as Brightspark’s plan is to get more accredited investors involved in each deal by requiring as little as $10,000 per investor (it currently boasts a network of 2,000 accredited investors). That plus a targeted approach to the tech startup scene has allowed the company to be more inclusive and, just as importantly, fast on its feet.
“We’re impatient, really,” says Sophie Forest, Managing Partner for Brightspark, in conversation with Cantech Letter. “The usual VC approach doesn’t allow for quick fund development. We can’t wait two years to get a standard institutional fund up and running, especially in tech.”
Led by Kensington Capital Partners, the company’s new financing will be used to grow its team and extend its reach to more investors and startups across the country.
“We’re excited to use this funding to grow our company,” says Forest. “We’re in Ontario and Quebec at the moment and we’re looking to set up an office in Vancouver and to build on our infrastructure and capabilities.”
So far, Brightspark’s new model has led to investments in tech companies such as Hubba, Nudge Rewards, CrowdCare, Classcraft, gShift, nGUVU, AdHawk, and NanoMagnetics.
The company touts $7.5 million in investments this year, with an aim to reach $10 million a year, which would put them at an investment level similar to VC funds in the $100 million category.
“We have been closely tracking Brightspark’s progress since the firm implemented its new model, and we are pleased with the continued growth and momentum we’ve seen to date,” says Rick Nathan, Managing Director at Kensington Capital, in a press release.
Forest says that venture investing in Canada’s tech space is really hitting its stride, thanks to a well-developed support system that helps to nurture young companies in the early stages.
“The big difference is that today, tech is everywhere,” says Forest. “The percentage of companies that are affected by tech is increasing, plus the ecosystem and the support system for startups in Canada has grown significantly.”
“New companies can rely on accelerators, on incubators and government programs, they can use innovation hubs like Toronto’s MARS or Montreal’s Notman House,” she says. “It’s all making it easier for companies to get to stage when they know that they have something, which is all beneficial and positive for investors like us.”