Welcome to CVCA Central’s Member Profiles series! Here we highlight the innovative and impactful organizations that are a part of Canadian Venture Capital and Private Equity Association (CVCA) community. Each profile offers a glimpse into the characteristics driving these organizations.
Today, we are excited to welcome and profile, a new member of the CVCA, Bizmark Business Markets!
Tell Us About Bizmark
Avoiding a Compliance Nightmare: How Bizmark Protects Emerging Managers
For many emerging managers, transitioning from start-up founder to fund manager can feel like navigating a minefield. The exhilaration of raising capital can quickly turn into a nightmare if securities laws are not meticulously followed. Bizmark provides unique risk-mitigation compliance services to ensure this nightmare never becomes your reality.
Bizmark’s Value Proposition: Your Shield Against Compliance Risks
Bizmark offers a tailored value proposition for emerging managers:
Comprehensive Risk Mitigation: Our Exempt Market Dealer (EMD) processes – Know Your Product (KYP), Know Your Client (KYC), suitability assessments, and AML compliance — are designed to meet all regulatory requirements. We help you navigate the regulatory landscape, ensuring your capital raises are secure and compliant. Our services work in conjunction and supplement the work of your existing financial and legal professionals.
What Does Bizmark Focus On?
Compliance for Growth
Compliance isn’t just a regulatory necessity; it’s a crucial component of your growth strategy. Bizmark’s commitment to compliance turns risks into opportunities for building trust and facilitating growth.
- Proactive Risk Management: Our approach to risk management identifies and mitigates potential compliance risks, allowing you to focus on your core business activities without fear of regulatory issues.
- Transparent Investor Relations: Clear and compliant communication with investors is essential for building trust. We help maintain these relationships, ensuring your investors feel secure and informed.
Streamlined Investment Rounds
In addition to our compliance services, Bizmark excels in streamlining investment rounds by working closely with prospective portfolio companies. This separate service offering ensures that portfolio companies are well-prepared for funding, making the investment process smoother for your fund:
Portfolio Company Readiness: Our boutique team of engineers, accountants, lawyers, and MBAs collaborates to thoroughly prepare prospective portfolio companies for venture capital and private equity rounds. By conducting due diligence, advising on necessary documentation, and enhancing overall presentation, Bizmark ensures portfolio companies are capital-ready and attractive to potential co-investors. This comprehensive approach significantly increases the likelihood of funding and accelerates the investment process.
Who Are the Key People at Bizmark?
Brett Lovas, President & Chief Compliance Officer: With over 20 years of experience in the energy and financial services industries, Brett is a Professional Engineer (P.Eng.) and holds an MBA. He has a proven track record of implementing effective compliance programs. His deep understanding of securities laws and regulations ensures that all processes meet the highest standards, helping emerging managers avoid common pitfalls and navigate complex regulations with ease.
Kirk Goodman, Legal Counsel: Kirk is a lawyer with extensive experience in corporate finance and business development. With a strong focus on strategic planning and execution, Kirk’s leadership ensures that every aspect of capital raising and investment rounds is optimized for success. His expertise in financial markets and his commitment to client success make him an invaluable asset to Bizmark.
What Is Bizmark Excited About?
At Bizmark, we’re not just focused on compliance; we’re excited about how it can be a powerful catalyst for growth. We believe that by turning compliance from a regulatory requirement into a strategic advantage, emerging managers can unlock new opportunities and build lasting trust with their investors.
We are thrilled to be at the forefront of this transformation, helping fund managers navigate the complex landscape of securities laws with confidence. Our commitment to meticulous compliance isn’t just about avoiding pitfalls; it’s about setting the stage for long-term success and growth.
Bizmark is an Exempt Market Dealer registered in Alberta and Ontario, and our extensive network of industry professionals, regulatory bodies, and investors is a testament to our dedication to supporting your fund’s growth. We are excited to leverage this network to provide our clients with invaluable resources, fresh industry insights, and exclusive investment opportunities that can propel their funds to new heights.
Case Study: The Nightmare Scenario — The Cost of Overlooking Investment Compliance
Imagine this: You’ve transitioned from running a successful start-up to managing a fund. Your investors are primarily friends, family, close business associates, and high-net-worth individuals who trust your vision. But as you begin raising capital, you overlook crucial compliance steps.
Suddenly, you’re facing a series of cascading disasters:
- Regulatory Scrutiny: Without proper capital raising processes, regulatory bodies flag your fund for non-compliance. This triggers an in-depth investigation into your fundraising activities, creating a whirlwind of stress and uncertainty. Unsuitable investments, even with accredited investor attestations, are a leading cause of sanctions by securities commissions. Lawyers are not trained or permitted to provide the necessary compliance services; this requires specialized qualifications and registration.
- Investor Panic: News of the regulatory scrutiny leaks to your investors. The trust and confidence they placed in you waver. They begin demanding their money back, fearing legal repercussions and financial losses. Improper investment marketing or risk disclosures, particularly to elderly, inexperienced, or unqualified investors, can escalate this panic, as these investors may feel misled and seek legal redress.
- Financial Penalties: The investigation uncovers that your Anti-Money Laundering (AML) compliance was insufficient. As a result, hefty fines and penalties are imposed, draining your fund’s resources and casting a long shadow over your financial stability. Legal actions and penalties can follow (even jail time, in certain cases) if investment risks were inadequately disclosed or considered, further compounding financial strain.
- Reputation Damage: The damage to your reputation is severe and long-lasting. Future fundraising efforts become nearly impossible as word spreads about the compliance issues and the regulatory penalties. Investors and partners will be wary of engaging with a fund tainted by non-compliance.
- Unintentional Triggering of Registration Requirements: Activities such as soliciting investments or managing private equity and venture capital funds can inadvertently trigger registration requirements under securities laws. Overlooking these requirements could result in severe legal repercussions, including fines and forced cessation of operations, as well as intensified scrutiny on all fund activities. This is a very grey area of law that changes frequently and can differ from province-to-province.
Overlooking the necessary compliance requirements, the dream of managing a successful fund has turned into a nightmare, with legal battles, financial losses, and a tarnished reputation. This is a scenario no emerging manager wants to face.
By addressing the unique challenges faced by new fund managers, showcasing our expert senior staff, and highlighting our commitment to compliance and growth, Bizmark aims to be an indispensable partner for CVCA Emerging Managers. For more information about our services, visit our website or contact us at brett@bizmark.ca.
