LEGAL DISCLAIMER

The information contained in this presentation is provided solely for informational purposes and does not constitute an offer or

solicitation of investment in any Brightspark limited partnership related to any companies. Anything contained in this presentation

should not be construed as creating a presumption by you, Brightspark that you are an accredited investor. We make no

representation or warranty, express or implied, with respect to any data provided to you regarding any information provided by the

companies on its web site or in this presentation, and will not be liable in any way to you or to any other person for any inaccuracy,

error or omission of any company data.

Please be aware that investments in early stage companies contains a high level of risk and you should consider this prior to making

any investment decisions.

Learn more:

www.brightspark.com/risk

External factors

INDIVIDUALS ARE INVESTING IN

CANADIAN STARTUPS

Major disruptions in the market

60% of the world’s largest market caps are tech companies

20% decrease since 2010 in post-IPO lift in valuation for tech companies

12% to 23% shift of the average allocation of accredited investor portfolio to private equity

1 million + accredited investors in Canada

ACCREDITED INVESTORS IN CANADA

To qualify as an accredited investor in Canada, individuals or entities must meet at least one of the following requirements.

Not sure if you qualify? Check with the Ontario Securities Commission:

www.osc.gov.on.ca

Software is eating the world

10%tech

The 10 companies with the largest market capital

32%tech

60%tech

10 years ago 5 years ago Today

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$ B

illio

ns Value creation on public

markets

Value creation on privatemarkets

Tech returns are migrating to private markets

Investment Fundamentals

INVESTING SERIOUSLY IN STARTUPS

Build your network and reputation – let the deals come to you

Build deal flow

Determine your investment strategyThesis, Pace, Focus

Learn from other people’s mistakes

Educate yourself

WHAT’S IN A TERM SHEET?

Money + Control

Non-legally binding Confidential Drafted by the lead investor New term sheet every round of financing, but the first term sheet sets the grounds for future funding

CONQUERING THE TERM SHEET

Price / Valuation

Two things impact valuation: stock option pools and warrants

How do you determine a fair valuation?

Market comparables Previous rounds Traction Team Competition for the deal Ownership amounts / percentages to motivate founders and management Analysis of what a “win” gets you upon an exit

CONQUERING THE TERM SHEET

Liquidation preference – two scenarios

Important terms:

• Liquidity event• Actual preference• Participation: full participation, capped participation, non-participation

WIN LOSE

If the company sells for X timesinvestment

If the company sells as a “fire sale”, investors want to ensure you get your

money back before the people who have “sweat equity” or founder shares.

CONQUERING THE TERM SHEET

Operating the company

You want to ensure that the company will be well managed, that there are appropriate “checks and balances” in place, that shareholders rights are protected.

Board of Directors

• Usually a balance of investor, company, founder and outsider representation• Chosen by mutual consent of the board OR voted upon on the basis on

proportional share ownership on a common-as-converted basis

Ask yourself

Do you want board representation, control, observer rights?

CONQUERING THE TERM SHEET

Protective Provisions

Rights that investors have on certain actions by the company. They do not eliminate the ability to do certain things, they simply require consent of the investor.

Often negotiated:

• Raising of the debt threshold• Minimum threshold of pref shares outstanding for the protective provisions to apply

Anti-dilution Drag-along Tag along (or ”co-sales”)

INVESTOR RIGHTS

Redemption rights

Redemption rights are principally designed to protect investors from a situation where, after a period of time, their portfolio company is just moving “sideways” and, accordingly, is not an attractive acquisition target or IPO candidate.

In that case, the company could be required to repurchase their shares back.

Pro-Rata Participation Right

The right to continue to participate in future rounds so that you can maintain your ownership.

VERY important to investors. Why?

Because you want to “double down on your winners”. So, you want the company to be OBLIGED to let you invest more if you want to in future financings.

NEGOTIATION

Entrepreneurs want to:

• Build a successful business• Raise enough capital to bring their vision to life • Keep as much control over the company as possible• Share the risk and reward with investors

Investor’s point of view

• Maximize IRR• Wise spending of money• Not to get diluted• Exit• Reputation

ABOUT DUE DILIGENCE

Due Diligence can take anywhere from 20 minutes (Dragon’s Den) to a few months (Brightspark)

The Emerging Market

VEHICLES FOR INDIVIDUAL INVESTORS

BRIGHTSPARK VENTURES

We curate the 1-2% best deals

from high-growth potential early

stage tech companies

Brightspark-managed fund set

up per deal and invests in

every deal, manages due

diligence, co-investments, and

overall portfolio

Accredited Investors gain

insider access to the best deals

and invest on a per deal basis

alongside top institutions and

funds

20+ years of VC experience, 30+ tech, software & entrepreneur experience

Delrina was the grandfather of the tech industry in Canada

Many of the best VCs and successful CEOs in Canada “seed” out of Brightspark

Repeat entrepreneurs gravitate to us – If there are great deals out there, we see them first!

Dealflow is approx. 5-7 deals a year – We seek quality over quantity

ACCESSIBLE VENTURE CAPITALCrowdfunding VC

BRIGHTSPARK’S INVESTMENT THESIS

Team

Stage

Market

Price

INVESTOR BEST PRACTICES

Diversify your portfolio

Invest in what you know

Invest alongside experienced investors

Post-investment involvement

Investor etiquette

…did we mention diversify?

PORTFOLIO MANAGEMENT TIPS

Keep your investment size consistent

Double-down on winners in follow-up rounds

Diversify – invest across many sectors

Build a big portfolio

Figure out how much you can afford before deciding how much to invest

Be patient

Only invest money you can afford to lose

AVOID THESE COMMON MISTAKES

Waiting too long before investing for the first time

Spreading yourself too thin

Putting all your eggs in one basket

Asking the wrong questions

Ignoring red flags

Hype / Fear of missing out

Incorrectly manage your expectations

Market Timing