A New Model of VC in Canada: Brightspark Looks to Disintermediate Its Own Industry

TechVibes | Rob Lewis | Jan 13, 2014

Brightsparks Managing Partner Mark Skapinker - A New Model of VC in Canada: Brightspark Looks to Disintermediate Its Own IndustryLast week Techvibes reported on the stealthy seed round funding of Toronto's Hubba. While the cash injection dominated by Facebook friendly angels didn't sneak under the radar, a more interesting angle around another investor has emerged.

Toronto's Brightspark Ventures is listed as Hubba's lead investor and was responsible for more than $1 million of the round.

For those unfamilar with the 14-year-old venture capital firm, they won the CVCA's 2011 Deal of the Year Award for their joint investment in Radian6 (acquired by Salesforce for $326 million). But this time Brightspark has disintermediated its own industry and is using a new model built for a modern VC industry that is being challenged by innovative funding opportunities.

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Techvibes got in touch with Brightspark's Managing Partner Mark Skapinker to learn more. According to Skapinker, Brightspark's new model is unique in Canada.

"We are the first Canadian VC to focus on accredited investors as fund investors instead of just relying on traditional fund-of-funds," he says. "As you likely know, the number of Canadian fund-of-funds has dramatically shrunk and is now made up of a few Government sources. So, instead of just relying on these sources, we now reach out and essentially crowdsource/crowdfund our fund investors."

Skapinker explained that Brightspark now creates a separate VC fund for every investment they make and finds angels (Canadian accredited investors) to invest in that fund. He describes it as essentially a “curated” deal model similar to efforts in the US (e.g. Fundersclub) and Israel (e.g. ourcrowd). Brightspark structures each investment as a "VC deal” and so are able to invest under the VC investment rules set by the security commissions.

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