Diverse or underrepresented investors and fund managers will benefit from £500m of government backing to help high potential new entrants develop the track record they need to become the investors of the future, it was revealed today [11 July 2025].
The initiative aims to reduce the significant gap in venture capital investment for underrepresented founders and investors. It will target at least 50% of investment going to female fund managers.
Targeted at women, ethnic minorities, people with disabilities and those from deprived backgrounds, a new £400m package from the British Business Bank will be available, starting in 2026, which will operate across three pillars:
- Back more diverse fund managers directly through the Bank’s Enterprise Capital Funds programme, the Bank’s scheme to support early-stage businesses with high growth potential
- Invest more in supporting micro-funds, funds with around £10-15m and the first step on the venture capital ladder for new investors
- Back partners, such as venture capital funds, to invest smaller amounts in talented individuals to build a track record and to provide training, giving those without personal wealth or connections the opportunity to become investors.
An additional £50m will be available for female-led venture capital funds, doubling the British Business Bank’s commitment to £100m and supporting the Invest in Women Taskforce.
Research shows just 2p of every £1 invested in venture capital funding in the UK goes to female-founded businesses and only 13% of senior individuals on UK venture capital investment teams are women, the government said.
By backing diverse and emerging fund managers, the initiative not only strengthens the UK’s venture capital ecosystem but also ensures that entrepreneurial ambition is no longer limited by background, gender or geography. This targeted support will help build a more dynamic, inclusive economy that works for everyone, according to the press statement.
Louis Taylor CBE, CEO of the 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 £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.”
The news comes alongside the latest Investing in Women Code report out today, which tracks and promotes investment into women-led businesses. It finds that investing in female and ethnic minority-led businesses could add 13% to the value of the UK equity market, underscoring the importance of backing diverse founders. The Code was launched in 2019 in response to the Rose Review’s findings that a lack of funding was one of the most significant barriers to women seeking to effectively scale a business.
The British Business Bank is the UK government’s economic development bank. Established in November 2014, its mission is to drive sustainable growth and prosperity across the UK and to enable the transition to a net-zero economy, by improving access to finance for smaller businesses. Its remit is to design, deliver and efficiently manage UK-wide smaller business access to finance programmes for the UK government.
The British Business Bank’s core programmes support over £17.4bn of finance to almost 64,000 smaller businesses.
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