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Microfunds

In this section:

In progress

This guidance outlines the application and investment process for the Microfunds segment.

We welcome applications from first-time fund managers seeking to raise an early-stage Venture Capital fund to invest equity or quasi-equity capital into high-growth startups. The Microfunds segment is designed to support early-stage investors raise their first fund and build an investment track record that might otherwise be out of reach.

While the initiative supports a wide range of early-stage ventures, it does not invest in funds focused on:

  • Infrastructure
  • Property
  • Debt finance
  • MBO/MBI’s  
  • Leveraged Fund Investments

Prospective Managers interested in applying for an Investor Pathways Capital Microfund are encouraged to start by reviewing all relevant information, including the Investor Pathways Capital Overview, Assessment Criteria, and Fund Administration & Structure sections. After familiarising themselves with these materials, applicants should complete the Pre-Application Form located in the How to Apply section of the website.  

Cohort model

The Microfunds pillar operates on a cohort model, bringing together fund managers who have successfully closed a Microfund through the initiative to form a peer network. Applications for cohort two will open in Autumn 2026, with future cohorts scheduled based on demand, offering Prospective Managers multiple entry opportunities over time. 

Application process

The application process is highly competitive, and only the strongest proposals will progress to successfully close a Microfund through Investor Pathways Capital. Over its four-year delivery period, the initiative aims to support around 30 high-quality Microfunds that best meet its criteria and objectives.

The application journey consists of the five stages outlined below, beginning with the Pre-Application Form - a short eligibility check to confirm alignment with the high-level requirements. Eligible applicants can then formally enter the process at Stage 0 ('Formal Application'). 

While the stages below outline the typical path, the process may vary depending on individual circumstances and progression through each stage is not guaranteed. Every proposal is treated with respect, and all those involved in the process are bound by strict confidentiality provisions to protect ideas and information.

Most early-stage interactions between Prospective Managers and the Investor Pathways Capital Team take place virtually via Microsoft Teams, with opportunities for in-person meetings as proposals advance. Although timelines may vary, the team will provide regular updates to ensure Prospective Managers remain informed throughout the process.

While we seek to back proposals that closely align with the initiative's aims, the Investor Pathways Capital Team may, at any stage, decide not to move forward with applications that, based on the information provided, do not fully meet eligibility requirements or strategic goals. Final selection rests with the Investor Pathways Capital Team and is informed by thorough commercial, financial, and legal due diligence, alongside any additional information or advice considered relevant. 

StageObjectiveOutcomeDocumentation
Pre-Application Form To provide a quick and simple way for Prospective Managers to check whether their proposal aligns with the high-level Microfund requirements.Prospective Managers immediately learn whether their proposal is eligible to progress, giving early clarity and guidance, with the option to resubmit the form as the proposal develops. N/A
Stage 0 – Formal Application To gather detailed information about the proposal, including team, track record, structure, investment strategy, and alignment with the access-to-capital indicators. Prospective Managers may be invited to an Exploration Call, or receive a decision that the proposal is not the right fit at this stage.
  1. Application Form
  2. Track Record Proforma
Stage 1 – Exploration CallTo explore the proposal in depth, answer questions, and ensure mutual understanding between the Prospective Manager and the Investor Pathways Capital Team. Prospective Managers may progress to the Pitch Meeting, or receive a decision that the proposal is not moving forward.
  1. Fund Model
Stage 2 – Pitch Meeting To allow Prospective Managers to present their full proposal and engage directly with the team through discussion and Q&A. Prospective Managers may be invited to proceed to Due Diligence, asked for further clarification, or receive a decision that the proposal is not ready to progress. 
  1. Slide Deck 
Stage 3 – Due Diligence To verify details of the proposal, review supporting materials, and assess readiness for potential investment.Prospective Managers may progress to the British Business Bank Investment Committee, be required to provide additional information, or receive a decision that the proposal is not moving forward.
  1. Reference List
  2. Data Room
  3. Due Diligence Questionnaire
Stage 4 – Investment Committee To secure final approval from the Bank’s Investment Committee.Successful applicants become Fund Managers under the Investor Pathways Capital Microfund, subject to Legal Execution and any conditions.N/A
Stage 5 – Legal Execution Complete all legal documentation required to close the proposed fund.   Either the fund closes, or the fund does not reach close. 
  1. Legal Documents 

Pre-Application Form

The Pre-Application form for the first cohort is now closed. We’ll be running future cohorts in line with demand, with the next cohort currently planned for autumn 2026.

Pre-Application Form objective

To provide a quick and simple way for Prospective Managers to check alignment with the high-level requirements for an Investor Pathways Capital Microfund.

Pre-Application Form outcome

Prospective Managers receive an immediate indication of their eligibility to progress to a Formal Application, providing early clarity and the option to resubmit the form as their proposal develops. 

Stage 0 - Formal Application

If a proposal meets the high-level eligibility requirements, Prospective Managers will receive an email inviting them to complete a detailed Application Form. This stage allows the Investor Pathways Capital Team to gain a comprehensive understanding of each fund proposal and assess its fit with the initiative's aims and objectives. 

Prospective Managers will be asked to provide information on:

  • Access to capital
  • Team and expertise
  • Track record
  • Investment strategy
  • Financial terms and structure

The information provided will help the Investor Pathways Capital Team to evaluate the strength and potential impact of each proposal in expanding access to capital for talented first-time fund managers.

Following review of the Application Form, the Investor Pathways Capital Team will either;

  • Invite you to an Exploration Call to discuss your proposal in more detail; or
  • Decide not to progress your proposal at this stage. 

Stage 0 objective

To gather detailed information about the fund proposal, including team, structure, investment strategy, and alignment with the access-to-capital indicators. 

Stage 0 outcome

Prospective Managers receive a decision on alignment, and those meeting the criteria are invited to the Exploration Call. 

Stage 1 - Exploration Call

If the fund proposal demonstrates potential alignment, Prospective Managers will be invited to a 45-minute Exploration Call with at least two members of the Investor Pathways Capital Team. Held virtually via Microsoft Teams, this session is an opportunity to explore the proposal in greater depth and engage in an open conversation.  

The Exploration Call has two main aims: 

  1. To deepen understanding of the proposal and assess whether it’s ready to be shared with the wider Investor Pathways Capital Team; and
  2. To give Prospective Managers greater clarity on how the initiative operates 

Following the Exploration Call, Prospective Managers may;

  • Be invited to a Pitch Meeting to present the proposal in full; or
  • Receive a decision that the proposal is not moving forward. 

Stage 1 objective

To explore the fund proposal in depth, answer questions, and ensure mutual understanding between the Prospective Manager and the Investor Pathways Capital Team.

Stage 1 outcome

Applicants either progress to the Pitch Meeting or receive a decision that the proposal is not moving forward.

Stage 2 - Pitch Meeting

Prospective Managers who progress beyond the Exploration Call will be invited to present their proposal to several members of the Investor Pathways Capital Team. Pitch Meetings take place in person at one of the British Business Bank offices in Sheffield or London.  

This stage provides an opportunity for Prospective Managers to present the proposal in full, showcasing the detail, ambition, and vision behind the strategy. It also allows the Investor Pathways Capital Team to explore the proposal more deeply - asking focused questions to better understand its strength, alignment with the initiative’s goals, and the readiness of the management team for potential support.

Following the Pitch Meeting, Prospective Managers may;

  • Receive a decision that the proposal will not move forward;
  • Be asked to provide additional information to clarify specific aspects of the proposal; or
  • Be invited to progress forward to the Due Diligence stage

Stage 2 objective

To allow Prospective Managers to present their full proposal and engage directly with the team through discussion and Q&A.

Stage 2 outcome

Prospective Managers may be invited to proceed to Due Diligence, asked for further clarification, or receive a decision that the proposal will not move forward.

Stage 3 - Due Diligence

Once the Investor Pathways Capital Team determines that a proposal is ready to progress, the Due Diligence stage begins. This step enables the team to review the proposal in detail so they can make a well-informed decision.  

At this stage, referencing may be conducted to verify the information provided in the proposal. Prospective Managers will be invited to complete a Due Diligence Questionnaire (DDQ) and upload supporting materials to a secure Data Room.  

The Investor Pathways Capital Team will conduct an initial review of the materials provided and may request additional information or clarification via email, call, or meeting. Based on this review, the proposal may either be declined, require further clarification, or be presented to the British Business Bank’s Investment Committee for final consideration.  

Following Due Diligence, Prospective Managers may;

  • Receive a decision that the proposal will not move forward;
  • Be asked to provide further clarification; or
  • Be invited to progress to the Investment Committee stage.

Stage 3 objective

To verify details of the proposal, review supporting materials, and assess readiness for potential investment. 

Stage 3 outcome

Prospective Managers either progress to the British Business Bank Investment Committee, provide additional information if requested, or receive a decision that the proposal will not move forward.

Stage 4 - Investment Committee  

The Investor Pathways Capital Team formally present the proposal to the British Business Bank Investment Committee.  If successful, the British Business Bank will proceed with awarding an Investor Pathways Capital mandate to a Prospective Manager. Following Investment Committee, a proposal may;

  • Receive a decision that the proposal will not move forward;
  • Be approved subject to conditions and the satisfactory completion of legal documentation 

Stage 4 objective

To secure final approval from the Investment Committee and complete all legal and administrative steps necessary to close the Microfund. 

Stage 4 outcome

Successful applicants become Fund Managers under the Investor Pathways Capital Microfund, ready to deploy capital in alignment with the initiative’s objectives.  

Once approved at Investment Committee, Prospective Managers will receive an Offer Letter from the British Business Bank. During this stage, negotiations on non-mandatory terms and the legal documentation occur between Prospective Managers and the British Business Bank, including their respective legal advisers.

A copy of the Investor Pathways Capital Microfunds draft Limited Partnership Agreement will be made accessible at the Resources section of the Investor Pathways Capital web page in the near future. 

Stage 5 objective

Complete all legal documentation required to close the proposed fund. 

Stage 5 outcome

Either the fund closes, or the fund does not reach close.   

Assessment Criteria

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