A broader assessment of the market for small business finance as a whole was recently published by the British Business Bank.

This report builds on that document to provide a fuller exploration of the issues facing small business equity finance markets.

First, the report provides an overview of reasons why equity is an important source of finance, particularly for growing small businesses. It also highlights the wide ranging role currently played by British Business Bank, and Government generally, in small business equity markets.

Second, the long-term features of small business equity finance are explored, highlighting both the structural market failures that have persisted in equity markets and recent cyclical weaknesses.

Third, existing and new data sources on private equity markets are used to explore recent trends in equity investment, both for the market as a whole and in more detail at the seed, venture and growth stages.

Finally, it offers some conclusions as to how to improve the functioning