British Business Bank backs 10 first-time venture funds

The British Business Bank has committed up to £90 million to 10 first-time UK venture capital fund managers in the first allocation from its £400 million Investor Pathways Capital programme.

As a cornerstone investor, the bank will back a group of new microfunds with target sizes of £10 million to £20 million. The selected funds are 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.

The programme is designed for managers raising institutional backing for the first time, with a focus on those who have faced barriers to accessing venture capital. The funds will invest at the pre-seed and seed stages across areas including artificial intelligence, deep tech, climate, defence, and consumer businesses.

The first cohort reflects a broad mix of backgrounds among its managers. The bank said 57% of general partners in the group are women and 43% are from Ethnic Minority backgrounds.

Seven of the 10 funds are led by solo general partners, while the other three are run by teams of two or three partners. The bank said this reflects an effort to widen the route into institutional fund management for emerging investors.

The selection followed a competitive process that drew 151 applications for the microfunds segment. All 10 chosen firms are first-time institutional managers, many of whom are building on experience as operators, community organisers or early-stage investors.

Policy backdrop

The announcement aligns the bank's investment effort with the government's broader push to support company formation and expansion. Ministers have also highlighted changes to tax and share incentives as part of that agenda.

"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", said Rachel Reeves, Chancellor of the Exchequer, HM Treasury.

Mark Sims, Managing Director and Head of Development Equity Funds at the British Business Bank, said the commitment marked the initiative's practical start.

"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", said Sims.

Fund Focus

Several of the selected managers have defined investment themes linked to founder backgrounds or specific sectors. Common Ventures focuses on founders educated in the state system, while Future Impact Ventures targets inclusive climate businesses.

The Tech Bros Fund is aimed at technical female founders at the pre-seed stage. Mustard Seed Fund focuses on consumer brands, while Blue Lake VC targets immigrant founders in the UK.

Firstdoor VC is investing in what it describes as access infrastructure. Almanac Ventures is centred on early-stage European deeptech businesses working in industrial competitiveness, resilience and decarbonisation, while Twin Track Ventures focuses on defence-related businesses.

Openseed VC plans to write first cheques to operators starting technology companies, while Evertrue Capital focuses on founders at the earliest stage. Together, the funds span a range of sectors, drawing growing interest from early-stage investors as the UK looks to deepen its domestic venture market.

Liz Bailey, Director of Development Equity Funds at the British Business Bank, highlighted the group's sector specialisms.

"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", said Bailey.

The programme is intended not only to provide capital to the managers themselves, but also to attract additional private investment into their funds. That would help first-time managers establish track records in a market where access to institutional money often depends on previous fund performance.

This has been a recurring issue in venture capital, where new entrants can struggle to raise money despite experience as founders, operators or angel investors. Supporters of the model argue that broadening the range of investors allocating capital can influence which founders and sectors receive backing at the earliest stage.

"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", said Meghan Stevenson-Krausz, former Chief Executive Officer, Diversity VC.