Microfunds

Microfunds aim to increase and diversify the pool of venture fund managers in the UK by supporting high-potential individuals from a range of backgrounds to launch their first venture capital fund.

Who is this page for

This page is for individuals looking to raise their first venture capital fund, who have tried to raise a fund and encountered personal and systemic barriers. It is not for startups seeking funding, or individuals looking to raise or join a talent fund.

What are Microfunds?

Microfunds are early-stage venture capital vehicles led by first time fund managers. The fund must be a privately managed vehicle, established for the purpose of investing equity capital into SMEs. Typically, applicants structure their funds as English Limited Partnerships, a widely used structure for funds that are managed by professional fund managers on behalf of ‘passive’ third party investors.

Fund structure (at a glance)

• Total fund size: £5m - £20m
• British Business Bank cornerstone: up to 50% of the fund
• Remaining capital: raised from other Limited Partners
• Structure: English Limited Partnership (GP/LP)
• Domicile: United Kingdom
• UK content: no less than 65% of investments to be into UK businesses

Objectives

Microfunds aim to:

• Broaden access to venture capital fund management by supporting high-potential individuals who have tried to raise a first venture capital fund and encountered personal and systemic barriers.
• Grow and diversify the pool of venture fund managers in the UK by helping first-time managers establish themselves in the venture capital market.

How Microfunds Work

Microfunds applications open in cohorts, with one cohort running each year contingent on demand. Applicants progress through an assessment process designed to evaluate their alignment with the access objectives of Investor Pathways Capital and the strength of their fund proposal.

Is this right for you?

Right for you if

• you are looking to raise your first venture capital fund

Not right if

• you are a startup seeking finance (our Finance Finder tool will help you to discover different types of finance).
• you are raising a fund focused on infrastructure, property, debt finance, MBO/MBIs, Leveraged Fund Investments.
• you are an individual looking to join a talent fund cohort.
• you are an established VC fund manager looking to raise a talent fund.

Applications for future cohorts will open each autumn, offering prospective managers multiple opportunities to apply over time.