Assessment Criteria

This section outlines the key assessment criteria the Investor Pathways Capital Team uses to assess proposals. 

The criteria are grouped under five broad headings to help Prospective Managers understand expectations and prepare a thorough, confident application:

• Access to Capital
• Team & Expertise
• Track Record
• Investment Strategy
• Financial Terms & Structure

Each area plays an important role in the application process, and successful proposals will demonstrate strength across all five.

The detail provided below is not an exhaustive checklist. The Investor Pathways Capital Team does not expect all information to be available at the early stages. Clear guidance will be provided on what is required at each stage, and information will be requested progressively as proposals move through the process (for further detail see Application Process).  

Access to Capital

The Investor Pathways Capital initiative is designed to support first-time managers who have limited access to the financial resources needed to raise a fund and build an investment track record. 

Assessments by the Investor Pathway Capital Team will be guided by two core access to capital indicators:

• Limited access to finance;
• Limited access to established LP networks.  

This is anticipated to have an impact on fostering a more diverse investor community. Its impact will be tracked by monitoring the profiles of supported investors to measure progress in broadening market participation and increasing diversity.

Team and Expertise  

Prospective Managers may apply as solo General Partners ("GPs") or as part of a team. Applicants should demonstrate the knowledge, experience, and capability required to build, manage and exit a portfolio of non-listed equity investments. If applying as a team, Prospective Managers will also need to demonstrate that the team will be able to work together effectively for the life of the fund. 

There is no expectation of a traditional finance or investment background. Relevant experience can come from investment, operational, technical, entrepreneurial, or other professional roles, reflecting the diverse paths first-fund managers may take. Crucially, this experience should clearly support and align with the proposed investment strategy.

Prospective Managers should be transparent about external commitments, whether professional, advisory, or otherwise, and outline how potential conflicts of interest will be managed. While the Investor Pathways Capital Team recognises that first-time fund managers may balance multiple responsibilities, it is essential to demonstrate that sufficient focus and commitment will be dedicated to managing the Microfund and supporting portfolio companies.

When assessing the proposed management team, the Investor Pathways Capital Team will focus on whether the team demonstrates the potential to succeed in key areas such as:

• attracting and sourcing a pipeline of high-potential startups and early-stage businesses seeking risk capital by leveraging networks, industry knowledge, or personal experience.
• assessing the suitability of investment opportunities, including understanding business models, growth potential, and key risks.
• determining and negotiating the appropriate terms and pricing for equity or quasi-equity investments in early-stage companies.
• providing hands-on support and guidance to help founders and management teams execute growth strategies, overcome operational challenges, and strengthen their businesses.
• monitoring and tracking portfolio company progress, understanding key metrics, and reporting outcomes to investors.
• realising returns through helping portfolio companies achieve successful outcomes through follow-on funding rounds, strategic sales, or other exit opportunities, appropriate to the scale and stage of the Microfund.
• understanding the sectors in which the fund will invest, combined with the knowledge and experience that supports the ability to guide and grow portfolio companies.

Information requested from Prospective Managers will include, but is not limited to:

• existing commitments on their time that will impact on their ability to dedicate their time to a Microfund at the point of close.  
• details of their proposed role, responsibilities, and terms of employment within the Microfund, including how much of their time will be devoted to management of the Microfund.
• relevant skills, expertise, and previous experience, including a summary curriculum vitae.  

Track Record

The Investor Pathways Capital initiative targets first-time fund managers, so the team takes a pragmatic and inclusive approach to evaluating track record. Prior experience managing institutional funds is not required and conventional investment track records are not expected. Instead, we welcome details from a wide variety of professional and personal experiences. This may include, but is not limited to:

1. Investing experience or involvement in investment-related activity, even without personally committing capital. This could include roles at venture capital firms, participation in investment scouting, advisory work, or other experiences that demonstrate insight into investment decision-making.
2. Operational, technical, or entrepreneurial experience in high-growth startups, where you have contributed meaningfully to company growth and scaling.  

When assessing track record, the Investor Pathways Capital Team will look for evidence of:  

• Strong investment judgement, demonstrating the ability to evaluate opportunities thoughtfully, weigh risk versus potential, and make reasoned investment decisions, even on smaller deals or early-stage companies.
• Exposure to high-growth startup environments, showing practical insight into the challenges founders face, the ability to support companies effectively, and a hands-on understanding of what it takes to grow and exit an early-stage business successfully.
• Ability to source, diligence, and competitively transact deals, including identifying opportunities, conducting analysis, negotiating terms, and completing transactions, appropriate to the scale of a Microfund.
• Capacity to add value to portfolio companies, providing practical guidance, advice, or support that helps founders grow their business, overcome operational or strategic challenges, and achieve meaningful outcomes.

Information requested from Prospective Managers will include, but is not limited to:  

• A completed Track Record Proforma, which will be attached to the email alongside your Application Form once you have completed the Pre-Application Form. This will include:: 
  • details of any investments made or supported, either individually or as part of a team, citing your involvement in the investment process.  
  • details of any roles in high-growth startup companies, highlighting contributions to activities that supported business growth.
  • Where applicable, dates and details of investments or company support should be provided.  
• a list of references, within Stage 3 of the application process, Prospective Managers may be asked to provide sufficient details to verify any track record of individuals named in their proposal, to provide details of referees and to provide consent for the Investor Pathways Capital Team to carry out further background checks and referencing.

Investment Strategy

As part of their proposals, Prospective Managers are asked to set out their investment strategy. The articulation of investment strategy, including the targeting provisions, will form part of the investment mandate that is included in the legal agreements for each Microfund. It is envisaged that prospective Microfunds will operate within a tightly defined investment mandate, for example, focusing on particular business sectors, stages of development, geographical locations and/or investment tranche sizes,  which will be determined by the Prospective Manager.

A Prospective Manager’s investment strategy should be driven by commercial considerations. The Investor Pathways Capital initiative strongly values strategies that are coherent, achievable, and well-matched to the team’s skills, networks, and experience.

Investor Pathways Capital Microfunds are expected to focus predominantly on UK-based companies, with a guideline of no less than 65% of investments to be into UK businesses. The appropriate level of UK content will be considered case-by-case during the evaluation process.  

Dealflow

Prospective Managers should present a thoughtful and credible approach to accessing early-stage investment opportunities that align with their proposed investment strategy. While we do not expect fully established pipelines, applicants should be able to show evidence that their proposed deal flow is of a quality and scale appropriate to support the proposed fund model. This might include outlining relevant networks, inbound and outbound sourcing strategies, and the proposed processes in place to manage and prioritise deal flow opportunities effectively.

Examples include, but are not limited to, relevant networks and connections built through prior work in venture or investment-related roles, operational or entrepreneurial experience, or community or ecosystem involvement. Applicants are encouraged to highlight how their unique perspective and networks can surface high-quality proprietary opportunities that are strongly aligned with their proposed investment mandate.

Strategy and Model

Prospective Managers must demonstrate that their proposed fund has good prospects of delivering a high financial return. For guidance, please refer to the Fund Model template accessed at the Resources section of the website.

Value Add

The Investor Pathways Capital Team will consider the Prospective Manager’s capacity to make non-financial contributions to the performance of their portfolio companies. This might include providing management support, mentoring, network connections, or other relevant experience that can help founders navigate the challenges of building and scaling a business.

In assessing this area, the Investor Pathways Capital Team will look at whether the level of ambition set out by the Prospective Manager is realistic and achievable, taking into account the resources available within the Microfund and any history of providing similar support. The assessment will also consider the likely time commitments and costs involved, ensuring that proposals strike the right balance between ambition and feasibility.

Ultimately, the emphasis is on demonstrating a clear and practical approach to adding value that aligns with the fund’s size, focus, and resources. Prospective Managers are encouraged to highlight how their unique experience, perspective, and networks can make a meaningful difference to portfolio companies.

Environmental, Social and Governance (ESG)

ESG factors will also be given appropriate consideration. Prospective Managers are encouraged to provide an overview of their approach to sustainability, responsible investment, and their existing or planned ESG policies and practices.  This includes considerations within the fund operation and their assessment of potential portfolio companies. Prospective Managers must demonstrate that the proposed Microfund activities align with the British Business Bank stainability mission, particularly regarding Net Zero and Diversity, Equity & Inclusion (“DEI”).    

Information on Investment Strategy requested from Prospective Managers will include, but is not limited to:  

• overall approach (sector-specific, generalist, opportunist etc.);
• description of the proposed value-add and any examples of its execution;
• length of investment period and the proportion of total commitments to be retained for follow-on investments and to meet other expenses of the partnership after the end of the investment period
• target number and value of investments in each year of the fund’s investment period, and into the portfolio post-investment period;
• target sector(s) for portfolio companies (if applicable);
• target stage(s) of development of portfolio companies;
• target location(s) for portfolio companies (if applicable);
• sources of dealflow;
• a fund model - template accessed at the Resources section of the website.

Fund Operation

To support first-time fund managers in efficiently establishing and operating their Microfunds, the Investor Pathways Capital initiative aims to partner with trusted fund operations providers. Successful Microfund managers may be asked to engage these providers as part of their fund administration and operational framework. Leveraging pre-approved fund service providers is designed to reduce the operational burden on first-time managers, allowing them to prioritise making investments and growing their funds from day one. 

Financial Terms and Structure

We understand that first-time fund managers may face challenges in meeting standard General Partner (‘GP’) commitment expectations. A GP commitment is not required to apply for an Investor Pathways Capital Microfund, as we do not wish to create unnecessary barriers to entry for applicants. All applications will be assessed on a case-by-case basis, regardless of whether a GP commitment is in place. While GP commitment may be noted, it will not be a decision-making factor in the due diligence process.

The Investor Pathways Capital Team recognises that investors typically wish to remunerate fund managers through a combination of:

• A management fee, set at a level that is just sufficient to enable the fund manager to invest and manage the fund effectively; and
• an appropriate carried interest provision, with any hurdle set at a level that is stretching but achievable. The carry rate should be no more than is sufficient to create a strong incentive for the fund manager to maximise the financial performance of the fund.

However, this structure may not be appropriate in all cases, and Prospective Managers may want to discuss alternative remuneration structures. If so, any proposed alternative should clearly explain why it is desirable from the perspective of the Investor Pathways Capital Team and other investors in the fund. They must provide a clear link between fund performance and the remuneration of the fund manager.

Prospective Managers must also specify the level, structure and timing of any other fees or charges that would be applied, e.g., any application, arrangement, and monitoring fees to be charged to investee SMEs. They should also note the Investor Pathway Capital Team’s very strong preference for such charges, where levied, to accrue to the fund rather than to the fund manager. Prospective Managers should demonstrate that any such fees are kept to a minimum. This ensures that as much of each investment as possible is available for the SME to develop its business, rather than to pay fees back to the Microfund Where fees relate to a specific investor in the Microfund, (e.g., in the case of commission fees paid to IFAs or intermediaries who introduce investors to the fund), the Investor Pathways Capital Team would expect these to be borne by the investor or manager concerned, and not by the fund as a whole. However, these fees should also be kept to a minimum.

As part of each proposal, the Investor Pathways Capital Team will also wish to see projected budgets for the fund manager, to demonstrate that the level of the proposed fees will be sufficient to enable the fund to be properly managed, but not excessive.

It is the Investor Pathways Capital Team’s preference that each of the Manager, the General Partner and the Founder Partner proposed within a Microfund structure maintain its principal place of business within the UK. They should not seek to be domiciled, qualified or registered in its own name or any other name under the laws, statutes, codes, regulations, taxation code or similar of any jurisdiction other than the UK. If any of the entities within the proposed fund structure are not to be domiciled in the UK, Prospective Managers will need to provide satisfactory explanation as to why the fund is to be structured in this way.

Where the activities of a proposed Microfund would fall within the financial services regulatory regime under the FSMA, the Prospective Manager must also demonstrate that they meet the requirements of that Act (for example in relation to FCA authorisation) or have credible plans to do so.

Information requested from Prospective Managers will include but is not limited to:

• Fund Size, Term, and Structure
• Total commitment required and details of any other private investors you have received commitments from.
• Management Fee, the level, structure and timing of management fees and other remuneration to the fund manager should be set out. It will be a negative feature if the proposed level of charges or fees does not appear commercially appropriate or appears to be to the detriment of either the fund or its portfolio companies.
• Full financial projections for the fund management company. These projections should demonstrate that the fund manager will be generating income that is sufficient to cover the costs of managing the fund, but not excessive; and full financial projections for the partnership itself.
• Carried Interest, the Investor Pathways Capital Microfund team will have regard to the strength of the link between the financial performance of the fund and the remuneration of those individuals responsible for taking the investment decisions and otherwise managing the fund.
• Any other fees and costs to be charged to the fund and/or investee companies.  
• Fund structure including ownership of the management company.

Sources of Private Capital

The British Business Bank will typically commit up to 50% of the total fund size. Any request above this threshold will be considered on a case-by-case basis, provided it aligns with the proposed fund strategy. Prospective Managers are asked to set out a realistic and credible strategy for securing private capital alongside the British Business Bank’s commitment. The Investor Pathways initiative is designed to improve access to capital for first-time fund managers, many of whom may not yet have established LP networks or secured investor commitments, so we have an internal workstream dedicated to mobilising a pool of LPs to support the microfunds we back. If you already have soft commitments or are in conversations with other LPs, you are welcome to include this in your application, but it is not a prerequisite. You do not need to have matched funds secured before applying.

Where Prospective Managers have begun to develop relationships with investors, they are encouraged to share any relevant details, such as expressions of interest, ongoing conversations, or indicative commitments. Where such relationships are not yet in place, applicants should instead focus on describing their approach to fundraising: the types of investors they hope to engage, the rationale for targeting those groups, and the steps they plan to take to build credible relationships.

In reviewing this area, the Investor Pathways Capital Team will not assess applicants on the size or status of their existing networks, but rather on whether they present a thoughtful and achievable plan for building them. The emphasis is on demonstrating that the fundraising approach is proportionate to the fund model and aligned with the applicant’s vision and strategy, recognising that managers from outside traditional networks may need time and support to translate that plan into practice.

How to Apply

After reading the above guidance and related sections, if Prospective Managers believe their proposal fits the Investor Pathways Capital Microfunds criteria and they are considering applying for a Microfund, they should complete the Pre-Application Form.