The British Business Bank has announced a new £400 million Investor Pathways Capital initiative to support emerging investors from underrepresented groups to break into venture capital.

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 support investors entering the field by backing diverse range of fund managers, investing in microfunds to support small, early-stage funds, and working with partners investing smaller amounts in individuals to build an investment track record.

The bank said that the scheme will target at least 50 per cent of investment going to female fund managers.

It added that its 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 per cent 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 per cent to the value of the UK equity market, underscoring the importance of backing diverse founders.

Louis Taylor, chief executive officer of the British Business Bank, said that the initiative has the potential to unlock the country’s full commercial potential by supporting diverse and emerging fund managers who can in turn support talented entrepreneurs currently underserved by 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,” he added. “The UK equity market currently experiences a significant funding gap for diverse founders, negatively impacting their ability to start a business.”

Earlier this month, the British Business Bank announced a new initiative for female investors considering making an application to one of the bank’s equity programmes.

The Emerging Female Investor Open Office Hours scheme aims to break down barriers and offer an open and informal space for female investors to ask questions about applying to one of the bank’s equity programmes.

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