Sugar Free Capital raises $32M inaugural fund to back early-stage MIT founders | TechCrunch

Sheena Jindal is from Boston.

She grew up there, attended MIT, and worked at the Boston Consulting Group for several years. She launched a startup, worked at a startup, and then became an investor at Bessemer and Comcast Ventures (CV).

Last year, her worlds collided when she decided to launch her own fund, Sugar Free Capital, a firm that focuses on investing in technical founders from MIT. She nabbed LPs, including the family offices of heavy-hitting tech executives from companies like Nvidia and Citadel, and on Monday announced the closing of Sugar Free’s $32 million inaugural fund.

One premise of the fund is found in the name. While working at CV, she led dozens of deals but found herself dismayed at the sky-high valuations of the 2021 era. She kept referring to investment opportunities as being “too sugary, in the sense that valuations were too high,” she told TechCrunch.

From there, she started thinking about the innovation of the past few years and how it was focused on optimization. “But we are really entering the age of intelligence,” she said. She designed a thesis around the idea that capturing the age of intelligence would require two things: technical founders, predominantly those with a “systems engineering mindset,” which is what MIT brings, she added, and concentration.

“The data have shown us historically that venture returns are concentrated among a select group of winners.”

The focus on MIT also has another reason. Unlike Harvard and Stanford, there isn’t a big class of MIT alumni who are early-stage investors, even though MIT founders often go on to start and work at lucrative companies. “MIT folks go into finance, but they go into more quantitative roles,” she said — more hedge fund and late-stage investing.

That white space gives Jindal, a rare solo woman GP, an outsized opportunity. She plans to invest in 15 early-stage companies (she’s already backed four), writing checks that range from $1 million to $5 million. The firm focuses on AI native infrastructure and picks a new theme each quarter to focus on. For example, this quarter, she is looking for companies focused on physical AI, data center optimization, and AI agents.

Sugar Free has already backed a defense company, a gaming company, and a company in workflow automation. Jindal hopes to cut at least four to five checks a year. Much of the inbound is from her reaching out to founders or referrals, but she’s open to cold outreach.

Overall, Jindal feels lucky about this fund. The fundraising environment was and is hard for many GPs, especially solo ones, and especially women. She said LPs liked that her firm provided good access to MIT talent and had a clear thesis.

“We are in the transition period between this new world order of AI native technology and the infrastructure and business models of the past,” Jindal said. “I am excited to see how we’re able to harmoniously combine these two in terms of infrastructure, technology, and the human experience, and to me, that’s really exciting.”