A new government review of the Financial Services and Markets Act could prove vital in boosting investment in small businesses, according to the National Business Angels Network (NBAN).
The Act, which was introduced in 2000, outlines how finance companies are allowed to promote and sell investments to entrepreneurs and businesses.
Currently, shares in unlisted companies can only be marketed to individuals who are certified as either ‘high worth’ or ‘sophisticated’ investors.
NBAN said that it has conducted research which found that over 70 per cent of investors have never been offered ‘investor status’ certificates from qualified professions, while over half did not even know such certificates existed.
According to NBAN, many small firms are missing out as only a small number of investors are allowed to fund unlisted companies.
