Why who controls the capital matters to female founders

The debate about the female funding gap often focuses on the founders seeking capital: their pitch, their network, and their understanding of the investment process. Those things matter. But so does who is making the decisions.

The Government has announced its intention to invest a further £100 million through the British Business Bank’s Investor Pathways Capital initiative. The next phase is intended to support first-time fund managers and up to 10 new microfunds, with applications due to open in autumn 2026.  

What makes the initiative worth a closer look is not simply the scale of funding. It is its potential to change both which businesses receive investment and who gets to make those investment decisions. Women still receive a fraction of capital - the gap is not subtle. 2p in every £1 of UK equity investment goes to all-female founding teams.

Women have also historically been underrepresented in senior VC investment roles. The Government cited a figure of 13% when it announced Investor Pathways Capital in 2025, although that figure should be viewed as a point-in-time measure rather than a current universal benchmark for the sector - Those figures may be connected.

Evidence from the Investing in Women Code suggests an association between the gender balance of investment decision-makers and the businesses that receive backing. Where women are in the majority on investment teams, 13% of investment-committee decisions involved all-female founding teams, compared with 7% for majority-male teams.

This does not prove that gender balance alone determines an investment outcome. Fund strategy, stage, sector, geography, and portfolio construction all matter. But it does underline a more fundamental point: the networks through which opportunities are sourced, the experience investors recognise and the business models they understand can shape which founders move from introduction to investment decision.

Changing who makes decisions

This is where Investor Pathways Capital is relevant.

The £400 million initiative is designed to support emerging and underrepresented fund managers who can face barriers to entering venture capital, including limited access to capital, networks, and an established track record. It has three pillars: backing diverse fund managers through Enterprise Capital Funds, investing in microfunds, and supporting talent-focused funds that help prospective investors build experience.

It also has a clear target:

That is a meaningful shift in emphasis. In the first microfund cohort, the British Business Bank committed up to £90 million across 10 new microfunds. Women represented 57% of the general partners across that cohort.

Female founders have heard plenty about improving their pitch, widening their networks, and becoming more familiar with the investment process. Those are worthwhile goals. But a funding gap this persistent is unlikely to be closed solely by asking women to navigate the existing system more effectively.

There is another lever: changing the system itself. More women raising funds, shaping investment strategies, and making allocation decisions can broaden the range of founders, business models and opportunities that reach the investment table. It will not remove every barrier, but it can address one of the structural factors behind the gap.

An economic opportunity

This is not only an argument about representation. The 2025 Investing in Women Code report found that meeting unmet equity demand from viable female- and ethnic-minority-led businesses could add 13% to the value of the UK equity market. That is an estimate of potential market value - not a guaranteed annual uplift - but it points to capital and growth opportunities that the current market may be missing.

So the significance of this next £100 million phase reaches beyond the money itself. If it widens the pool of people deciding where venture capital goes, it may also widen the pool of businesses considered worth backing.

For years, the conversation about the female funding gap has centred on changing the women asking for investment. Investor Pathways Capital is, in part, a bet on changing who they ask.

Sources

• HM Treasury / British Business Bank, Venture capital access expanded for early-stage companies in UK, 7 August 2026 - planned £100 million next phase, £400 million programme, first 10-microfund cohort and autumn 2026 applications.

• British Business Bank, Investor Pathways Capital - programme structure and target of at least 50% of investment going to female fund managers.

• British Business Bank / Government evidence on UK female-founder funding - 2p in every £1 of UK equity investment going to all-female founding teams.

• Investing in Women Code, Annual Report 2025 - potential 13% uplift to UK equity-market value from meeting unmet demand among viable female- and ethnic-minority-led businesses.

• UKTN, British Business Bank commits £90m for next generation of VC investors, 25 June 2026 - first 10-microfund cohort.