Scout networks and regional funds are rewiring who gets access to UK venture capital
Updated: 6 days ago
There is a version of the UK funding gap story that gets told constantly, and it is true. Female founders raise less. Black and ethnic minority founders raise a fraction of what their numbers in the population would predict. Founders outside London and the South East compete for a shrinking share of a pot concentrated hundreds of miles away. All of that is well documented.
What gets discussed far less is the mechanism underneath it. Before a founder can be turned down for a cheque, they first have to get a meeting. For a large number of good founders in Britain, that first meeting is the actual barrier, not the size of the round.
The data on this is consistent enough to take seriously. British Business Bank research has found that businesses in regions with fewer local investor networks report substantially lower awareness of who the relevant equity investors even are, compared with founders in London and the South East, and that a majority of the UK's business angels are based in London.
A later update covering 2013 to 2023 showed the picture improving but still lagging, with 11% of rounds going to Global Majority Heritage founders against an 18% population share.
London's own share of UK equity investment has been falling, down to around 57% in 2025 from 60% the year before, but that still means well over half of all deal value flows to founders in one corner of the country. Beauhurst has separately found that accelerator programmes, often a founder's first structured route into an investor network, are just as concentrated, with nearly three fifths of all UK programmes based in London and every other region trailing far behind.
Extend Ventures' long running research into ethnicity and venture funding found that between 2009 and 2019 just 0.24% of UK venture capital went to teams of Black entrepreneurs, and that Black and multi ethnic founders collectively received around 1.7% of capital despite representing roughly 14% of the population.
None of this is really a story about investors being unwilling to fund good ideas. It is a story about who those investors ever hear from in the first place. Deal flow in venture capital has always run largely on referral, on someone an investor trusts vouching for someone they do not yet know. That is efficient when the referral network is wide and representative. It is exclusionary when it is not, and for a long time in Britain it has not been. The good news, and the part of this story that deserves more attention, is that a growing number of funds, banks and universities have identified that same mechanism as a fixable one, and are building infrastructure to fix it.
Ada Ventures offers the clearest example of what a deliberately engineered network looks like in practice. Rather than relying on the usual referral chains, the firm built a scout programme that has grown from around ten scouts at launch to roughly a hundred today, the large majority of them people from backgrounds underrepresented in UK tech and finance, each paid through a mix of finder's fees and carried interest for founders they successfully introduce. The result, according to the firm's own reporting, has been a portfolio with a markedly higher share of female and Black founders than the market average. The model is instructive because it treats network breadth as a sourcing advantage rather than a diversity add on. Widening who gets to make an introduction widens who gets found.
Capital allocators are applying similar logic further up the chain, to who controls the cheque book in the first place. The Investing in Women Code, established after the 2019 Rose Review of Female Entrepreneurship and now stewarded through the British Business Bank, has grown from twelve founding signatories to more than 330, spanning banks, venture firms, angel networks and lenders who report annually on their funding of female led businesses. The most recent reporting found that signatories funded a materially higher share of female founded teams than the wider market, and that the share of signatory capital reaching female led businesses had climbed year on year.
The Bank has taken the logic a step further with its Investor Pathways Capital programme, a fund of funds structure specifically backing first time and emerging fund managers from underrepresented backgrounds, with a stated ambition that half of that capital reaches female investors. Changing who sits on the investment committee is, on the evidence so far, one of the more direct levers on who gets backed, since research on mixed committees has found they direct more capital to all female founding teams than male dominated ones do.
Geography is getting the same treatment. The British Business Bank's Nations and Regions Investment Funds, including the Northern Powerhouse Investment Fund II, launched in March 2024 with 660 million pounds for the north of England, exist explicitly to put both capital and, just as importantly, local investor relationships and advisory support into regions that have historically had neither. Universities have started building their own version of the same fix.
Northern Gritstone, formed by Leeds, Manchester and Sheffield and since joined by Liverpool, has raised more than 300 million pounds to back science and deeptech spinouts that might otherwise never make it in front of an investor outside the so called golden triangle, precisely because the founders and the funds were never in the same room.
Alongside these larger vehicles, regional advisory networks such as Innovate UK EDGE and Barclays Eagle Labs continue to do the less glamorous but equally important work of getting founders their first proper conversation, a warm introduction or a piece of honest feedback well before they are investment ready, rather than a cheque.
Where this heads from here is a genuinely open question, and one worth putting plainly rather than dressing up as settled. Building parallel networks, scouts, regional funds, diverse investment committees, is more durable work than writing a single cheque, but it is also slower to show results and easier to quietly deprioritise if fundraising conditions tighten and funds retreat to familiar habits.
The organisations profiled here are treating network breadth as a competitive sourcing advantage, not a compliance exercise, which is the reason to think the shift will hold. The test for the sector over the next few years will not be whether headline diversity or regional statistics move a percentage point or two. It will be whether founders outside the usual postcodes and networks report that getting a first meeting has genuinely got easier, because that, more than any single fund's size, is the barrier that has quietly shaped who gets to build in Britain.
Key Takeaways
London still receives well over half of UK equity investment and hosts the majority of the country's business angels and accelerator programmes, meaning proximity to networks remains a structural advantage.
Black and multi ethnic founders continue to receive a share of UK venture capital well below their share of the population, according to long running Extend Ventures research.
Deliberately engineered networks, such as Ada Ventures' scout programme and the British Business Bank's Investing in Women Code, are showing measurably better outcomes than passive referral based deal sourcing.
Regional infrastructure, including the Nations and Regions Investment Funds and university backed platforms like Northern Gritstone, is starting to shift both capital and investor relationships away from London.
The open question is durability. Whether these network interventions become permanent industry infrastructure or fade if funding conditions tighten will determine whether access, not just cheque size, genuinely widens.
Sources:
British Business Bank, Beauhurst, Diversity VC, Extend Ventures, The Entrepreneurs Network.
The latest numbers
Figures on the Investing in Women Code published on 8 July 2026 put numbers on the committee effect described above. In 2025, 32% of the venture capital invested by Code signatories went to businesses with at least one female founder, up from 27% in 2024, against 15% across the wider equity market. Signatories directed 6% of their investment to all-female founding teams, compared with 2% in the wider market.
Within the signatory group, investment committees with a majority of women backed all-female founding teams in 11% of deals, compared with 8% for committees with a majority of men. The gap is modest, but it is measured on reported deals rather than surveys, which makes it one of the more concrete pieces of evidence that changing who decides changes who gets funded.
What it means for UK founders
For founders in the north of England, the Northern Powerhouse Investment Fund II is the most direct route into the regional infrastructure described here. It launched in Leeds on 21 March 2024 with £660 million to cover the North West, Yorkshire and the Humber, Tees Valley and the North East. It offers smaller loans of £25,000 to £100,000, business loans of £100,000 to £2 million and equity investments of up to £5 million, each delivered by named fund managers. The equity managers are Praetura Ventures in the North West, Mercia in Yorkshire and the Humber, and Maven Capital Partners in the North East.
Because these managers and their deal ranges are published, a founder can identify the right contact without first needing a warm introduction. Founders raising equity can also check whether a prospective investor is a Code signatory, since signatories report their funding of female-led businesses each year. Founders planning to combine regional fund money with angel investment under SEIS or EIS may want to take professional advice on how the rounds fit together.
Key facts at a glance
21 March 2024: Northern Powerhouse Investment Fund II launched with £660 million.
NPIF II deal sizes: loans from £25,000 to £2 million, equity of up to £5 million.
2025: 32% of Code signatory venture investment reached businesses with at least one female founder, up from 27% in 2024.
2025 wider equity market: 15% of investment to businesses with at least one female founder.
All-female founding teams in 2025: 6% of signatory investment, against 2% in the wider market.
Further reading
Frequently asked questions
What share of UK equity investment goes to London?
London's share of UK equity investment fell to around 57% in 2025 from 60% the year before. That still means well over half of all deal value flows to founders in London.
How much UK venture capital goes to Black and ethnic minority founders?
Extend Ventures found that between 2009 and 2019 just 0.24% of UK venture capital went to teams of Black entrepreneurs, and Black and multi ethnic founders received around 1.7% of capital despite representing roughly 14% of the population. A later update covering 2013 to 2023 found 11% of rounds went to Global Majority Heritage founders against an 18% population share.
How does the Ada Ventures scout programme work?
Ada Ventures' scout programme has grown from around ten scouts at launch to roughly a hundred, most from backgrounds underrepresented in UK tech and finance. Scouts are paid through a mix of finder's fees and carried interest for founders they successfully introduce.
What is the Investing in Women Code?
The Investing in Women Code was established after the 2019 Rose Review of Female Entrepreneurship and is now stewarded through the British Business Bank. It has grown from twelve founding signatories to more than 330 banks, venture firms, angel networks and lenders that report annually on their funding of female led businesses.
What is Northern Gritstone?
Northern Gritstone was formed by the universities of Leeds, Manchester and Sheffield and has since been joined by Liverpool. It has raised more than 300 million pounds to back science and deeptech spinouts outside the so called golden triangle.
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