British Business Bank backs first-time VC fund managers with up to £90m commitment
The British Business Bank is committing up to £90m to support a new generation of UK venture capital fund managers, marking the first investments under the Microfunds segment of its £400m Investor Pathways Capital initiative.
The Bank will act as a cornerstone investor in 10 new microfunds – Evertrue Capital, Common Ventures, Openseed VC, The Tech Bros Fund, Almanac Ventures, Future Impact Ventures, Blue Lake VC, Firstdoor VC, Mustard Seed Fund and Twin Track Ventures – with fund sizes ranging from £10m to £20m.
Investor Pathways Capital is designed to widen access to venture capital by backing talented first-time fund managers from a range of backgrounds, particularly those who have faced barriers to raising institutional capital. The initiative will support a more diverse and dynamic investment ecosystem across the UK, while unlocking new sources of early-stage finance for high-growth businesses.
The initiative is expected to crowd in significant private capital, while enabling the managers to establish institutional track records. Collectively, the 10 microfunds will focus on pre-seed and seed-stage investing, providing vital first-cheque capital to emerging businesses across sectors including technology, deeptech, artificial intelligence, climate, defence and consumer.
The diversity of the cohort is a key strength. More than half of general partners in the cohort are women, representing 57% of the total GP base, and 43% of GPs are from ethnic minority backgrounds. 7 of the 10 funds are led by solo general partners, with the remainder led by two- or three-partner teams, reflecting the initiative’s focus on opening institutional pathways to a broader range of emerging investment talent. Together, these characteristics underline the initiative’s ambition to address long standing structural barriers to entry in venture capital and expand access to institutional funding for underrepresented groups.
Chancellor of the exchequer Rachel Reeves,said: “We have the right economic plan – backing the next generation of investors to spur growth and ensure businesses start, scale-up and expand across every part of the country. Alongside investments from the British Business Bank, our significant changes to the Enterprise Management Incentive scheme and our venture capital tax schemes at the last Budget will help entrepreneurs attract and retain the best talent while supporting around £100m of extra investment a year”.
Mark Sims, managing director and head of development equity funds, British Business Bank, said: “The first Microfunds cohort under Investor Pathways Capital represents an important milestone, delivering on our commitment to build the next generation of UK venture capital investors. By backing first-time fund managers and improving access to finance at the earliest stages, we are helping to create a more diverse and resilient pipeline of high-growth UK companies”.
Liz Bailey, director, development equity funds, British Business Bank, said: “These funds bring deep sector expertise and highly targeted strategies across sectors like technology, artificial intelligence, climate and consumer. That specialism is critical at the earliest stages, where understanding emerging technologies and markets can make a real difference to company outcomes. These funds are positioned to spot and back ideas early, in sectors that will shape the future economy”.
Meghan Stevenson-Krausz, former CEO of Diversity VC, said: “Who gets to allocate capital shapes which ideas are funded, which companies are built and ultimately who benefits from economic growth. Investor Pathways Capital represents an important step towards broadening access to venture investing by helping talented emerging managers establish institutional track records. By de-risking participation for private investors and opening doors to a wider range of investment talent, the programme has the potential to strengthen the UK’s venture ecosystem and ensure that more of the country’s entrepreneurial talent can contribute to future growth”
The cohort was selected following a highly competitive process, with 151 applications received for the Microfunds segment. All 10 selected funds are led by first-time institutional managers, many of whom are formalising an existing edge built through prior operator experience, community-building, or early-stage investment activity.