People behind the product: Lucius Cary, Oxford Technology

By CoInvestor | 15 October, 2019

Lucius Cary - Founder and MD, Oxford Technology

Lucius Cary is the Founder and Managing Director of Oxford Technology. He has a degree in engineering and economics from Oxford University, an MBA from Harvard Business School and was an engineering apprentice at the Atomic Energy Research Establishment, Harwell. Lucius has over 30 years specialised experience in investing in science and engineering start-ups near Oxford.

What is the most rewarding aspect of your role?

It is a real pleasure coming to work - it is not really like work at all. All the staff at Oxford Technology are scientists/engineers and we are all interested in science and what the scientists with whom we interact are doing. We all work in an open plan office and there are almost always interesting conversations going on. We are well known in our niche (investing in science start-ups in Oxford) so we get a steady stream of people (maybe 500 per year, of which 100 are possible investments) coming to us, almost always referred to us by people in whom we previously invested. Meeting these people and hearing about what they are seeking to achieve is a real pleasure. Most are young, extremely bright and super enthusiastic.

What's the most challenging aspect of your role?

Having to say no. Of the 100 possible investments we could make each year, we can only cope with 5 or 6, so we have to say no a lot. This is obviously very disappointing for being told no.

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" ...the maths says that investing in high-risk high reward science start-ups under the SEIS scheme should deliver large returns to investors and we can now see this beginning to happen for real."

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How do you see your role changing in the next 3-5 years?

There will be no changes. It is a great pleasure to do what we do and it delivers excellent returns to our investors. We have an office in China, staffed by a Chenjie Ma who has an engineering degree from Oxford (and so understands both English and Chinese culture) and I hope this will grow over the next five years. The aim of this office is to help our investees sell their technology into the large Chinese market more quickly than might otherwise be the case.

What's keeping you up at night?

I am glad to say that I sleep soundly.

What makes your firm stand out?

We are the only fund manager who has specialised in investing in science start-ups for such a long time. All our investees are within an hour’s drive so we are able to have frequent informal meetings when issues arise. This too makes us unusual.

Also, we are super open with our information. We produce a quarterly report which has a page of information of each of our investees, including those which are not doing so well. Our investors really appreciated this honesty, which is rare in the industry.

What do you look for when investing in a business?

We like to invest in science start-ups which will cause major change in their markets if the science works. In other words we aim to invest in high-risk, high reward investments. Although some investors claim to do this, when it comes to the point, most investors are more fearful of losing money than making a huge return, so most actually invest in low-risk, low return investments.

The SEIS scheme is a huge help in this respect and congratulations to the Treasury for having introduced it in 2012. There are huge tax reliefs available to investors prepared to take the risk of backing start-ups including 50% of your investment back against income tax at the outset, and further loss reliefs if the business fails. So the cost of failures is hugely reduced. And any gains are tax free. So the maths says that investing in high-risk, high reward science start-ups under the SEIS scheme should deliver large returns to investors and we can now see this beginning to happen for real.

What industry journalist/commentator do your regularly follow?

I read New Scientist each week, and Luke Johnson in the Sunday Times. I get my information by spending my time talking to scientists and then working closely with those in whom we invest to help them be successful.

What is the best piece of advice you've taken?

Don’t involve lawyers in anything until you have a letter signed by all parties which sets out clearly everything which has been agreed. We don’t use lawyers at all for most of our deals. We invest purely on the basis of a simple shareholders agreement signed by all parties. This is faster and means that there is more money to spend on product development and marketing. As the business grows, then the legal agreements usually become more formal.

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People Behind the Product is an interview series produced by CoInvestor that highlights the key people themselves behind the wide range of tax-efficient investment funds you can find on our platform. By showcasing the fund managers behind the product, we aim to provide greater insight to the expertise in the market and in doing so, help advisers and investors learn more about the tax-efficient sector.

If you are interested in participating in the series, or would like to find out more, get in touch with Jessica at jessica.baker@coinvestor.co.uk.

About Oxford Technology

Since 1983, Oxford Technology has specialised in making and managing investments in start-up and early stage technology-based businesses with high growth prospects. In total, they have made more than 150 investments in technology start-ups. Almost all of them are within an hour’s drive of Oxford, so that they can be actively involved to help.

The investment team are all scientists or engineers by background, and understanding the technology is the starting point for any investment that they make.

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People behind the product: Lucius Cary, Oxford Technology

Lucius Cary - Founder and MD, Oxford Technology

" ...the maths says that investing in high-risk high reward science start-ups under the SEIS scheme should deliver large returns to investors and we can now see this beginning to happen for real."

About Oxford Technology