VA Angels Fund – Angel Sidecar Fund Managing Team: R Stewart Thompson Name of Fund: VA Angels Diversified PE Fund I L.P. Website: www.vaangels.com/va-angels-fund Fund Type: Angel sidecar fund
Restrictions: $12,500 minimum investment; must be Accredited Investor Fees: 3/20 – 3% total expenses, plus 20% carry-forward performance fee History: Managed by R Stewart Thompson, but since this fund is less than three years old, there is no track record yet Half of this Angel sidecar fund is allocated to co-invest alongside 10 VA Angel group investments. 35% is reserved for dry powder in follow-on investments. 10% will be invested in a VC investment with 500 Startups and 3% is reserved for expenses associated with managing the fund over its anticipated 5–9-year life. Carry-forward performance fee is 20%. Brightspark – Accessible Venture Capital Managing Team: Brightspark Ventures Name of Fund: A new fund (special purpose vehicle) is created for each investee company Website: www.brightspark.com Fund Type: Accessible venture capital through special purpose vehicles Restrictions: $10,000 minimum investment; must be Accredited Investor Fees: 1.5/15 – 1.5% annual MER with 4% cap, plus 15% carry-forward interest History: 66% average IRR over 10 years Brightspark Ventures has operated as a traditional venture capital firm since the 1990s with a successful track record of performance, averaging 66% IRR over the past 10 years. Two years ago, they shifted to what they call “accessible venture capital.” Instead of running a large fund that invests in multiple companies, they create a new fund for each investee company (e.g., Brightspark-Hubba) and Angel investors buy units of this fund, which is managed by Brightspark Ventures for a 1.5% annual fee (there is a three-year cap on this and 4% of the fund is reserved for expenses – the rest of the money is used to buy and hold shares of the investee company) and a carry-forward performance fee of 15%. Unlike traditional VCs, Brightspark’s fees are lower (1.5/15 vs 2/20 for most VCs) and Angels are given the opportunity to invest on a deal-by-deal basis. Once Brightspark completes due diligence and signs a term sheet, the almost 2,000 Angels in their network are notified of the opening of a new fund and are normally given up to a month to make a decision before the fund closes. In this way, Brightspark makes VC-quality deal flow and professional investment management available to Angels at a reasonable cost. Mark Skapinker, founder of Brightspark Ventures, says that roughly one-third of their investors are inexperienced Angels, one-third have done at least a few of their own deals, and one-third are more-experienced Angels, CEOs and experts from within the investee company’s industry. He sees tremendous appetite for these kinds of investment opportunities from Angels and continued growth in this kind of investment asset class. They strive to do 6–8 investments per year, putting at least $10–15 million into the hands of high-quality Canadian entrepreneurs.
How to Achieve Good Returns
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