The UK Government-owned British Business Bank has announced a new £400 million Investor Pathways Capitol initiative to support diverse and emerging fund managers across the economy.

The initiative aims to make it easier for new entrants, particularly those from underrepresented groups, to break into venture capital.

Expected to launch in 2026, the initiative aims to capture the value of a more inclusive investment ecosystem.

The initiative will back more diverse fund managers through the Bank‘s Enterprise Capital Funds programme.

It will also invest in microfunds to support small, early-stage funds, as well as back partners investing smaller amounts in talented individuals to build a track record, giving them the opportunity to become investors.

The initative aims to reduce the significant gap in venture capital investment for underrepresented founders and investors due to industry biases, relance on closed networks, and limited diversity among investors.

It will target at least 50% of investment going to female fund managers.

Research shows that 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.

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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, underscoring the importance of backing diverse founders.

“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,” Louis Tayler, chief executive officer, British Business Bank, said.

“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.”