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The equity risk capital market for young companies in Scotland 2000-200418/04/2006. Source: Scottish Enterprise, Queen's University Belfast, Equitas. Professor Richard T Harrison (Queen's University Belfast), Gavin Don (Equitas) 
 This is the second of Scottish Enterprise's annual studies of the risk capital market in Scotland, tracking all risk capital investments in young Scottish companies since 2000. In particular, the authors say their report demonstrates the on-going need for Scottish Enterprise intervention to work to improve the supply of finance for growing companies.
A vibrant risk capital market is vital for the development of an entrepreneurial economy. It is also clear that an entrepreneurial environment fosters dramatic jobs growth and economic prosperity. For example, a recently published report by the European Venture Capital Association estimated that one million new jobs were created by European private equity and venture capital financed companies between 2000 and 2004. Yet these figures only paint a partial picture of the influence of the private equity and venture capital industry on economic development, since they do not capture the activities of private investors, angel syndicates, corporate investors and hybrids.
The risk capital market in Scotland continues to grow, with a 40 per cent increase in investment activity from 2003 to 2004. £843m was invested in 490 young Scottish companies between 2000 and 2004.
Scottish Enterprise' influence on this segment of the risk capital market is substantial. The Business Growth Fund and the Scottish Co-investment Fund accounted for 7 per cent of total monies invested in Scottish young companies during 2004, yet we were represented in 55 per cent of all deals recorded, an increase from 4 per cent of the capital in 44 per cent of all deals recorded in 2003. A significant part of the renewed buoyancy in the Scottish risk capital market can, therefore, be attributed to the intervention of Scottish Enterprise.
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Scottish Enterprise is Scotland's main economic development agency, funded by the Scottish Executive. Our mission is to help the people and businesses of Scotland succeed. In doing so, we aim to build a world-class economy. For more details, visit www.scottish-enterprise.com
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