Frequently asked questions

The two initiatives have distinct purposes and assessment criteria. Investor Pathways Capital Microfunds is specifically focused on first-time managers who have encountered systemic barriers to accessing capital and LP networks, while Enterprise Capital Funds provides a separate route, lowering the barriers to entry for fund managers seeking to channel capital into the equity gap. Applicants should be transparent about any parallel engagement with the Bank, so that the most appropriate route for the proposal can be considered. 

Yes. Other public sector investors may participate but must not exceed 70% of the total fund size, including the British Business Bank's commitment. The proposed LP mix will be considered as part of the Bank’s assessment and due-diligence process.

There is no fixed number of Microfund investments for each cohort. The number supported will depend on the quality and fit of the applications received, the outcome of the Bank's assessment and due-diligence process, and the amount of capital required by successful funds.

Yes. We welcome applications from prospective managers who have none or limited access to the capital and LP networks needed to raise a first venture fund. This may include, but is not limited to, people from underrepresented backgrounds. Applicants will need to demonstrate the barriers they have encountered in accessing capital and LP networks. 

The process includes five key stages, as outlined on the Application Process page. Timings will vary depending on the proposal and the information required, but applicants should expect the assessment to take place over several months. Cohort 1 took approximately six months from application to Investment Committee for consideration, although timings may vary between cohorts. Progression is not guaranteed at any stage. 

Cohort 1 received 151 applications, of which 10 proposals received Investment Committee approval. This represents an overall approval rate of approximately 7%. Applications were assessed through several competitive stages, and progression at each stage was not guaranteed. 

A GP/LP structure is widely used for funds managed by professional fund managers on behalf of passive third-party investors. It enables the Bank to assess proposed managers and fund structures consistently and helps ensure that participating funds meet the standards required for public investment.  

IPC Microfunds will operate on pari passu terms, with the British Business Bank investing on the same economic terms as other Limited Partners. They will not use the gearing and profit-sharing waterfall applied under the Enterprise Capital Funds.

The British Business Bank will typically commit up to 50% of the total fund size, with the remaining capital raised from other Limited Partners. This requirement applies at fund level rather than requiring funding to be matched investment-by-investment. Applicants do not need to have secured the remaining capital before applying but should be able to demonstrate a credible plan for raising the balance from other Limited Partners. 

No. The Bank's commitment is intended to act as a cornerstone investment, with the remaining capital raised from other Limited Partners. Applicants should therefore demonstrate a credible plan for raising capital from other Limited Partners and achieving their proposed fund size. 

Full FCA permissions are not required at the point of application. However, applicants should have considered the regulatory model for the proposed fund and how the necessary permissions or approvals would be obtained.

The Bank gives successful applicants access to a group of fund service providers that can support areas such as fund establishment and administration. Please note that successful applicants are under no obligation to use these service providers. Applicants should still obtain their own legal, regulatory, and tax advice when developing their fund structure. 

The requirement applies to invested capital rather than the number of portfolio companies. Each Microfund is expected to deploy at least 65% of its investment capital in UK-based businesses. Any proposed exception would be considered case by case and in the context of the fund's investment strategy. 

No. Microfund managers are not required to make a General Partner commitment. The initiative is designed to lower barriers to entry, so a personal financial contribution from managers is not expected. Managers may choose to make a commitment, but it is optional. 

Yes. Applications are welcome from solo General Partners as well as small teams. Whether led by a solo General Partner or team, all proposals must demonstrate a credible plan for fulfilling the investment, operational and governance responsibilities over the life of the fund.  

Yes. A fund that is still fundraising or has completed a first close may apply. However, the initiative is designed for first-time managers with none or limited access to capital and LP networks. Applicants that have already raised institutional capital will therefore need to demonstrate the barriers they faced and continue to face in accessing capital and LP networks. All applications will be considered on their individual merits and in a competitive context. 

No. The initiative does not prioritise a particular region or sector. Proposals must, however, present a commercially viable and coherent strategy, supported by a capable team, relevant experience, appropriate fund terms and a credible route to deployment.

Across the four year programme, Microfund applications will operate through an annual application window. Information about future application rounds and relevant deadlines will be published on the Investor Pathways Capital pages of the British Business Bank website.

Not necessarily. We recognise that first-time fund managers may need to balance raising and establishing a fund with other professional or advisory commitments. However, once a microfund is closed, managers are expected to commit a significant proportion of their time to managing the fund. Applicants should be transparent about any other commitments post fund close, explain how any conflicts will be managed, and demonstrate that the team will have sufficient time and capacity to manage the fund effectively and support its portfolio companies. 

We generally define a first-time fund manager as someone raising their first institutional fund. However, some applicants may have experience of raising or managing a small fund, Microfund, syndicate, SPV, or other investment vehicle that did not provide the scale or access associated with an established fund manager.

Such applicants may be considered on a case-by-case basis where they can demonstrate that they continue to face systemic barriers to accessing capital and LP networks.