This landmark initiative will be delivered through three strategic pillars:
- Backing diverse fund managers via the British Business Bank’s Enterprise Capital Funds programme.
- Investing in microfunds to support smaller, early-stage investment vehicles.
- Supporting partners investing modest sums into talented individuals to help them build a track record as prospective investors.
The move seeks to reduce the longstanding venture capital funding disparities affecting underrepresented founders and investors, caused by systemic industry biases, limited access to networks, and a lack of diversity within investment teams. Notably, the initiative will aim for at least 50% of funding to go to female fund managers.
According to the latest Investing in Women Code report, just 2p of every £1 in UK VC funding currently reaches female-founded businesses. Moreover, only 13% of senior VC professionals in the UK are women. The report also highlights that improved representation can have a significant economic impact, estimating that investing in female and ethnic minority-led businesses could add 13% to the total value of the UK equity market.
Louis Taylor, Chief Executive Officer at the British Business Bank, commented:
“To deliver the Government’s growth mission it is critical that our most promising entrepreneurs can access the finance they need to grow their businesses, no matter who they are or what their background is. The UK equity market currently experiences a significant funding gap for diverse founders, negatively impacting their ability to start a business.
This new £400 million Investor Pathways Capital initiative will support diverse and emerging fund managers across the UK, in turn supporting talented entrepreneurs currently underserved by the UK equity market. It has the potential to unlock the UK’s full commercial potential and boost the UK economy.”
The Bank is further strengthening its support for female-led funds by doubling its current investment from £50 million to £100 million. This increased commitment will target funds aligned with the UK Government’s eight industrial growth sectors.
As a founding signatory of the Investing in Women Code, the British Business Bank continues to lead efforts to improve access to funding for female entrepreneurs. The 2025 Code report reveals that 31% of venture deals by Code signatories involved businesses with at least one female founder, outperforming the broader equity market.