Firms must overcome equity selling 'aversion The message to smaller companies has to be: We understand your aversion to giving up part of your business. So ask a different question - how can you be more competitive; how can you increase production - you need money and people. It has to be an equity-led recovery as we're suffering from an overhang of debt. The BGF was launched in 2011 and has so far invested £120m in 24 companies. It invests between £2m and £10m in businesses with annual sales of between £5m and £100m, and completed 21 deals last year - more than a quarter of the 80 comparable deals in this marketplace. Research has found there are around 25,000 UK companies with turnover of between £2.5m and £100m, with 5,000 having increased turnover by at least 10pc a year in two of three years. The growth capital market is tiny. It's tens of millions [of pounds] going into a market with 25,000 companies. It has been starved of capital for years, but that was masked by the availability of cheap credit. Now a structural gap in the market has been revealed," Mr Welton said. The fund was formed following government talks with high street banks, which also produced the Project Merlin lending agreement, and is owned by Barclays, HSBC, Lloyds, Royal Bank of Scotland and Standard Chartered. It was initially greeted with criticism that it would "crowd out" existing venture investors, but Mr Welton insisted these objections have so far proved unfounded. We're very rarely bidding against people when we invest in companies. We can be a stimulant to push the whole market forward - we look forward to hundreds of millions going into this market instead of tens of millions. Mr Welton said he expected BGF to invest around £200m across "30-plus" deals this year.