£500m VC Fund Introduced To Diversify UK Funding 

It’s no secret that girls face an uphill battle in securing enterprise capital funding. Research present that feminine tech founders want, on common, twice as a lot expertise to obtain the identical quantity of success as their male counterparts. 

In a push to deal with the injustice, the federal government has introduced a £500m funding to enhance illustration throughout the sector. The initiative will assist girls, ethnic minorities, individuals with disabilities, and people from disadvantaged backgrounds.

It goals to assist promising new traders set up themselves within the trade. By levelling the enjoying area for numerous fund managers, the initiative will seemingly create extra alternatives for founders from underrepresented backgrounds to entry capital.

What’s the new VC fund — and who’s it for?

The new VC fund is basically made up of a £400m package deal from the British Enterprise Financial institution, which fund managers will have the ability to entry from 2026.

The initiative has three core goals:

• Assist numerous fund managers instantly by the Financial institution’s Enterprise Capital Funds programme, a scheme to assist early-stage companies with excessive development potential enter the sector
• Spend money on extra micro-funds (funds with round £10-15m), step one on the VC ladder for a lot of new traders
• Assist VC funds in providing coaching to promising people, to assist those that aren’t from rich and linked backgrounds change into traders

There’s a further £50m pledged for female-led enterprise capital funds, which doubles the British Enterprise Financial institution’s dedication to £100m, supporting the Spend money on Girls Taskforce.

A significant precedence of the initiative is working in the direction of closing the gender funding hole; not less than half of the funding will likely be directed in the direction of feminine fund managers. 

The long-term aim is to assist numerous and rising traders who will help reshape the trade from the within out, in doing so, supporting extra female-run companies. 

By broadening who will get to award funding, the programme opens doorways for extra underrepresented founders to get monetary backing for his or her enterprise.

Why this issues for ladies founders

At current, there’s a stark lack of variety throughout the funding panorama. The federal government states that simply 2p of each £1 in UK enterprise capital goes to feminine founders. And solely 13% of senior traders in UK VC companies are girls.

This highlights the obtrusive imbalance and the seemingly hyperlink between the dearth of variety on the prime and the challenges feminine founders face in securing funding.

On this 12 months’s 2025 Startups 100 Index, we discovered that companies with no feminine founder obtained, on common, 3.3x greater than companies with a feminine founder.

It’s the same story for ethnic minorities. Black Seed VC, Karl Lokko says, “solely 0.24% of enterprise capital was allotted to Black founders over the previous decade,” underscoring how urgently the sector wants to alter.

The brand new fund is a each a symbolic and sensible response, a recognition that innovation doesn’t come from working with just one kind of founder. 

Making certain founders from each background can develop their enterprise expands the vary of concepts, views, and options that enter the market.

As Suzanne Ashman, Normal Companion at LocalGlobe, places it: “If Britain is to compete, then it should unlock the total breadth of its entrepreneurial expertise. Too typically, distinctive founders who fall exterior the standard mould go unnoticed.”

The way you’ll profit as a founder

Whereas the programme is primarily centered on growing variety amongst fund managers, there’s a robust probability its influence will ripple outwards. 

As a extra consultant group of traders enters the sector, high-potential startups, significantly these led by underrepresented founders, stand to realize higher entry to VC. 

With the initiative anticipated to roll out from 2026, now is a good time to begin constructing relationships, maintaining a tally of bulletins, and making ready to use when alternatives crop up.

Within the meantime, we have now loads of assets that will help you discover and safe different funding, equivalent to our information to the very best small enterprise grants.