The first £250,000 to £1 million of the Ariadne Capital Entrepreneurs Fund (ACE Fund) will target ‘game-changing’ businesses – those investors consider to have disruptive technology, business models or market vision.

As well as Julie Meyer herself, backers of the fund include un-named investors from the London Private Equity world and the following entrepreneurs:

• David Rowe, founder of EasyNet
• Marc Worth, founder of WGSN
• Rob Hersov, founder of Marquis Jet Europe
• Michael Jackson, former Chairman of Sage, Partygaming and Access Intelligence, Founder of Elderstreet
• Simon Capreis, gaming and betting private investor
• Gerard Bonnevay, Board Director of Success Europe, Former Board Director of Credit Agricole and founder of Celimage

On announcing the fund this morning, Meyer said:

Ariadne Capital has developed a model whereby we bring the gutsiest entrepreneurs into our portfolio, and advise them effectively on the Go to Market, the Board alignment, Corporate Structure and High Growth Management. Our new ACE Fund helps us to take that expertise to the next level.

The ACE Fund launch follows a similar fund, ProFounders Capital, announced by Lastminute.com founder Brent Hoberman and Bebo founder, Michael Birch, earlier this summer which plans to offer £30 million to early stage web/technology businesses.

The ‘entrepreneurs funding entrepreneurs’ sector seems to be very active at the moment in the UK. Perhaps a sign of the times.

Definitely an interesting bridge between angel and VC funding proper.

Ultimately though, as co-founder Errol Damelin set out in an interview about Wonga with SmallBizPod earlier this year, it’s the startup’s automated financial risk assessment back end that must be proving equally attractive as positive cash flow to investors.

The business has already provided cash advances to over 100,000 people with apparently very low default rates.

Errol Damelin said today:

We’ve built to scale and there is now huge scope for expansion and delivering even more value for our customers. Balderton Capital has backed us from concept and our two new investors show how game-changing the Wonga proposition is.

Being an innovative company in the financial services space was always going to be either impossibly difficult, or just what the industry needed after the great credit crunch calamities at the end of 2008.

It’s good to see Damelin and his team at Wonga have clearly impressed VCs and demonstrated that where there’s focus on a real business model and innovation, there’s still funding to be found.