The British Business Bank – the economic development bank for the UK –has announced a new £400m Investor Pathways Capital initiative to support diverse and emerging fund managers and make it easier for new entrants, particularly those from underrepresented groups, to break into venture capital.
The initiative is to launch in 2026.
The Investor Pathways Capital initiative will operate across three pillars, by one, backing more diverse fund managers through the British Business Bank’s Enterprise Capital Funds programme.
Two, invest in microfunds to support small, early-stage funds and three, back partners investing smaller amounts in talented individuals to build a track record, giving them the opportunity to become investors.
The initiative aims to reduce the significant gap in venture capital investment for underrepresented founders and investors due to industry biases, reliance on closed networks, and limited diversity among investors.
It will target at least 50% of investment going to female fund managers.
Research shows there is a correlation between female representation at venture capital firms and how much they invest in female-led businesses.
Just 2p of every £1 invested in VC funding in the UK goes to female-founded businesses and only 13% of senior individuals on UK VC investment teams are women.
The 2025 Investing in Women Code report has found that investing in female and ethnic minority-led businesses could add 13% to the value of the UK equity market.
“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,” said Louis Taylor, chief executive officer at British Business Bank. “The UK equity market currently experiences a significant funding gap for diverse founders, negatively impacting their ability to start a business.”
The new £400m 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,” added Taylor.
The bank has already committed to supporting the aims of the Invest in Women Taskforce by investing £50m into female-led funds through its existing programmes.
The bank will increase this commitment, investing a further £50m into female-led funds that are aligned with the eight growth-driving sectors of the Industrial Strategy, taking its total commitment to £100m.
The British Business Bank is a founding signatory of the Investing in Women Code, a government-led initiative in response to the Rose Review’s finding that a lack of funding was one of the most significant barriers to women seeking to effectively scale a business.
The Investing in Women Code report, published by the Department for Business and Trade earlier today, shows signatories outperform the wider equity market in their support for female-led businesses.
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