University of Manchester alumnus Dr Kevin Lomax has donated £1m to The Founders Fund, a new initiative designed to support students, staff and graduates launching early-stage businesses.

The University of Manchester has pledged a further £2m to the fund. Together, the donations will help entrepreneurs access investment to turn ideas into high-growth companies. The University has set an initial goal to raise £10m for The Founders Fund through philanthropic donations.

Lomax studied Liberal Studies in Science at the University of Manchester in the 1960s, a degree that combined pure science with technology, economics and the history of innovation. He went on to have a career in technology and business, helping to turn Misys, a software company, into a global business in the 1980s. In 1998, Misys became the first UK IT company to enter the FTSE 100.

Why early-stage funding matters

Lomax has spent much of his career investing in early-stage technology companies and has seen how a small amount of money at the right moment can transform an idea into a successful business. He points to one investment that reached a valuation of billions of dollars, but needed just $150,000 to get started four years earlier.

"If it didn't get the $150,000, it wouldn't have got off the ground," Lomax says.

The earliest stage of building a company is also one of the riskiest, with 8 out of 10 early ventures failing. This is why conventional investors are often reluctant to provide the first funding. Lomax argues that backing these early ventures is where future economic growth and job creation will come from.

How the fund will work

High-potential ventures are expected to typically receive investments of £25,000 to £250,000 in return for a small, non-controlling equity stake. The fund is about creating the opportunity to test an idea, learn, adapt and sometimes fail.

The Founders Fund is part of Challenge Accepted, the University's initiative bringing together its global community to tackle major challenges, unlock new ideas and turn innovation into positive impact.

Lessons from business experience

Lomax emphasises that people matter more than ideas when considering investment in early-stage companies. He looks first at the people involved and whether they have the skill set to deliver on an idea.

"You can have the best idea in the world, but if you don't have the skill set to deliver on that it won't succeed," Lomax says. "And that means recognising your own limitations."

He points to his own experience at Misys as an example. The company initially aimed to develop computer-aided design technology but changed course when it became clear that the market was telling them to move in a different direction. They turned instead to insurance software and found greater momentum.

"You start off with one aim, but you quickly recognise that actually you're going in the wrong direction, and you need to have a different one," Lomax says.

What happens next

The Founders Fund will be launched at the beginning of the University of Manchester's inaugural Innovation Festival. The call for applications is expected to open in January 2027.