Key Takeaways
- • ET Capital has closed the Cambridge Venture Index SEIS/EIS Fund 1, an early-stage venture vehicle that applies uniform investment criteria across up to 10 startups rather than picking individual winners.
- • The fund is already working on its first five investments in startups that have emerged from the University of Cambridge and other local accelerator programmes.
- • ET Capital's proprietary research modelled synthetic venture funds using financing histories of nearly 200 Cambridge-cluster start-ups from 1992 to 2024; five of six synthetic funds outperformed the FTSE 100 Index.
- • The fund targets individual investors, including business angels, and is structured around diversification and risk-limited returns.
- • ET Capital will hold minimal control rights as fund manager and adopt a founder-friendly approach, according to the fund's backers.
Summary
ET Capital has closed the Cambridge Venture Index SEIS/EIS Fund 1, a new vehicle designed to apply index-investing principles to early-stage venture capital. Rather than following the conventional venture model of selecting individual winners, the fund will apply uniform investment criteria to up to 10 startups emerging from the University of Cambridge and other locally based accelerator programmes. According to the publication, the manager is already working on the first five investments.
The fund's approach is grounded in proprietary ET Capital research. The study used the financing histories of nearly 200 start-ups in the Cambridge cluster to model the performance of a series of synthetic venture funds from 1992 to 2024. Applying the same criteria across all cohorts, five of the six synthetic funds outperformed the FTSE 100 Index. The manager presents this structured diversification as a way to deliver predictable, risk-limited returns, in contrast to traditional venture methods that can involve protracted investigation and negotiation, creating uncertainty and distraction for founders, and that concentrate on the success of individual investee companies, amplifying fund-level volatility.
Martin Rigby, managing director of ET Capital, said the successful close demonstrates "significant appetite for an alternative approach, one that makes it easy for founders to access capital while offering investors reduced risk through diversification." The fund was targeted at individual investors, who can often find it difficult to access the best deals coming out of the University and other originators in the cluster.
Struan McDougall, managing director of local angel syndicate Cambridge Capital Group and an investor in the fund, described it as an excellent opportunity for business angels to gain exposure to a wide range of deep-science deals. Richard Green, a Cambridge angel investor and backer of the fund, said the approach offers Cambridge's deep-science startups additional investment at a critical stage of development.
The fund has also committed to a founder-friendly structure. ET Capital, as fund manager, will have minimal control rights and will focus on supporting founders rather than challenging their role as managers.
The fund's approach is grounded in proprietary ET Capital research. The study used the financing histories of nearly 200 start-ups in the Cambridge cluster to model the performance of a series of synthetic venture funds from 1992 to 2024. Applying the same criteria across all cohorts, five of the six synthetic funds outperformed the FTSE 100 Index. The manager presents this structured diversification as a way to deliver predictable, risk-limited returns, in contrast to traditional venture methods that can involve protracted investigation and negotiation, creating uncertainty and distraction for founders, and that concentrate on the success of individual investee companies, amplifying fund-level volatility.
Martin Rigby, managing director of ET Capital, said the successful close demonstrates "significant appetite for an alternative approach, one that makes it easy for founders to access capital while offering investors reduced risk through diversification." The fund was targeted at individual investors, who can often find it difficult to access the best deals coming out of the University and other originators in the cluster.
Struan McDougall, managing director of local angel syndicate Cambridge Capital Group and an investor in the fund, described it as an excellent opportunity for business angels to gain exposure to a wide range of deep-science deals. Richard Green, a Cambridge angel investor and backer of the fund, said the approach offers Cambridge's deep-science startups additional investment at a critical stage of development.
The fund has also committed to a founder-friendly structure. ET Capital, as fund manager, will have minimal control rights and will focus on supporting founders rather than challenging their role as managers.
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