Why Octopus Future Generations VCT is entering an important moment

A young VCT, now entering its next phase

by Luke Edis, Lead Fund Manager, Octopus Future Generations VCT

I joined Octopus to help lead Octopus Future Generations VCT alongside Stan Williams, Fund Principal, at a moment that I believe really matters for investors.

Not just because the world is changing quickly, but because we believe Octopus Future Generations VCT itself could be moving into a new phase – with the hardest early years behind it, an established portfolio in place, and the opportunity to focus fully on the quality of investments still to come.

We are living through a period of real change. Technology is reshaping how businesses operate, from providing essential health services to energy and infrastructure, while many of the challenges facing society, from healthcare to climate, are becoming more urgent.

Moments like this have often mattered for investors. Innovation tends to come from young companies finding practical solutions to real-world problems, and history suggests these periods of change can create meaningful long-term opportunities for those prepared to take a patient view.

Venture capital is an asset class that has traditionally backed this kind of innovation early – and Venture Capital Trusts offer individual investors a way to access it in a tax-efficient structure.

What attracted me to Octopus Future Generations VCT specifically was the chance to actively manage a young VCT with strong foundations already in place, while still offering its portfolio companies meaningful scope to continue growing over the long term.

Why Future Generations VCT is positioned differently

Octopus Future Generations VCT provides access to a portfolio of early stage, unquoted UK companies using innovation and technology to tackle some of society’s most meaningful challenges.

These businesses are still early in their development, aren’t available on public markets and have not yet reached their full potential. That creates long-term growth potential, but it also means this is a high-risk investment and returns are uncertain.

For investors comfortable with that risk profile, the key question is not simply “why a VCT?”, but “why this VCT, at this point in time?”

Now in its fourth year, the VCT has built a diversified portfolio of 38 companies across a range of sectors and stages. It is still young, but it is no longer brand new – which means investors today are not funding a blank sheet of paper, but a portfolio that we believe has already navigated some of its most challenging early years.

Moving through the J curve

In a VCT’s early years, it takes time to build a diversified portfolio – both in terms of the number of companies and their stage of maturity – and for progress to be reflected in valuations.

In venture capital, capital is invested into young businesses, where failure rates are naturally higher and successful outcomes typically take four to seven years. Early on, businesses focus on building strong foundations. As they mature and scale, that early work can start to show through in performance and valuations. This pattern, often referred to as the “J-curve”, can be a feature of early-stage investing, although by no means a certainty.

Four years in, I believe Octopus Future Generations VCT could now be approaching a more interesting part of that journey.

The portfolio is now diversified across a broader range of companies at different stages of maturity, meaning it is no longer reliant solely on its earliest investments. It also includes more established businesses, such as Manual – a consumer healthcare platform that has grown significantly since our investment and scaled into a very sizeable business.

The VCT has also completed two exits, one partial and one full, which resulted in the VCT’s first dividend being paid to investors in September 2025. These milestones do not remove the risks involved, but they do reflect a portfolio that is beginning to mature and move through the stages of the venture capital lifecycle.

With a smaller NAV and more growth potential still ahead, this phase of the VCT can represent a particularly attractive period for new investors.

Access to high‑quality opportunities – at scale

One of the most important drivers of long‑term returns in venture capital is the quality of the opportunity set you are selecting from.

As part of Octopus Ventures, Octopus Future Generations VCT benefits from what we often describe internally as “doorstep deal flow” – a consistent stream of investment opportunities originating from across the wider Octopus investment platform.

We see businesses that are too early for some funds, too late for others, or outside the remit of specialist strategies – but which can be a strong fit for Octopus Future Generations VCT.

This gives us access to opportunities that many VCTs simply do not see, and allows us to be selective in where we deploy capital.

Founders are often keen to work with Octopus because of the long‑term approach and the support available across the wider platform – from networks and mentoring through to future funding capacity. Octopus Future Generations VCT often provides a lower‑friction way for founders to begin that relationship.

Speed, focus and adaptability

Another strength is how we operate as a team.

Stan and I have both developed our experience and networks across the venture market, and we are now focused on building something distinctive within Octopus Future Generations VCT.

As a smaller, dedicated investment team, we can move quickly, adapt our thinking as markets evolve, and spend time where it matters most – with founders and with the portfolio.

That agility matters more than ever.

Artificial intelligence and rapid technological change are reshaping markets at pace. Young companies are often best placed to adapt quickly, and investors who can stay close to those shifts – in mindset as well as in process – are better placed to identify opportunities earlier.

Looking ahead

For me, this feels like a moment where several things are coming together:

• A portfolio that has moved beyond its earliest and often most uncertain phase
• A new dedicated team focused on improving the quality of opportunities we back
• And a market environment where, access and adaptability matter more than ever

This is a high risk, long term area of investing and will not be right for everyone. But for investors comfortable taking a patient view, Octopus Future Generations VCT offers access to a portfolio that is already built – and an investment opportunity that is very much still unfolding.

Fundraise details

Octopus Future Generations VCT is currently open to new investment and is expected to close to new applications on 26 May 2026, or earlier if capacity is reached. Investors can benefit from a 2% early bird discount, and existing Octopus investors will pay a 0% Octopus initial fee when combining the early bird discount with the 1% loyalty discount available.

For advisers and investors planning early in the tax year, the current fundraise offers a way to access venture capital, long-term growth potential and VCT tax reliefs within a single, established structure.