Investment readiness programmes and access to finance: a critical review of design issues

Access by SMEs to finance is constrained by demand-side weaknesses. Most businesses are not investment ready. Their owners are unwilling to seek external equity finance and those who are willing do not understand what equity investors are looking for or how to 'sell' themselves and their businesses to potential investors. These weaknesses, in turn, compromise the effectiveness of supply-side interventions, such as initiatives to stimulate business angels or which create public sector venture capital funds. This has highlighted the need for investment readiness programmes that seek to increase the pool of investable businesses. This paper reviews the design and delivery of investment readiness programmes in the UK and draws out lessons for best practice.