The British Business Bank has launched a new £400 million Investor Pathways Capital program to help new and diverse fund managers and make it simpler for people from under-represented groups to get into venture capital.
The plan is to start in 2026 and run on three pillars.
It will:
- Support more diverse fund managers via the Enterprise Capital Funds initiative run by the British Business Bank.
- Invest money into microfunds to help tiny, new funds.
- Back partners put modest sums of money into bright people to help them create a track record and give them the chance to become investors.
The goal of the program is to address the big gap in venture capital funding for entrepreneurs and investors who aren’t well-represented because of prejudices in the business, a dependence on closed networks, and a lack of diversity among investors. It will aim for at least half of the money to go to female diverse fund managers.
Studies reveal that the number of women who work at venture capital companies is linked to how much they invest in enterprises run by women. Only 2p of every £1 spent in VC capital in the UK goes to enterprises run by women, and only 13% of senior people on UK VC investment teams are women.
The 2025 Investing in Women Code research says that investing in enterprises run by women and people of colour could raise the value of the UK stock market by 13%. This shows how important it is to support diverse entrepreneurs.
Louis Taylor, Chief Executive Officer, British Business Bank, said:
“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 emerging and diverse 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.”
Through its current programs, the bank has already promised to support the goals of the Invest in Women Taskforce by putting £50 million into funds run by women. The bank says it will make this promise even bigger by putting another £50 million into female-led funds that are in line with the eight growth-driving areas of the UK Government’s Industrial Strategy. This brings the total amount it has promised to £100 million.
The British Business Bank was one of the first organisations to join the Investing in Women Code. This was a government-led effort to help women who wanted to grow their businesses but couldn’t get the money they needed.
The Department for Business and Trade’s Investing in Women Code study demonstrates that signatories do better than the rest of the stock market when it comes to supporting firms run by women.
The 2025 Investing in Women Code report says that 31% of venture capital deals made by Code signatories were with companies that had at least one female founder. This is four percentage points higher than the overall market. The overall value of equity transactions to teams with all female founders was 5%, which is more than double the rate of the general market (2%).