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Purpose -This paper sets out to assess the market for start-up finance in the UK for high growth potential entrepreneurial firms. Design/methodology/approach -The paper uses data from the UK's Global Entrepreneurship Monitor surveys between 2001 and 2003 to assess the scale of equity finance in the UK. It further examines the strengths and weaknesses of the UK financial markets for supporting high growth potential firms on the basis of an additional survey of 60 experts conducted during September and October 2003. Findings -The paper suggests that there are areas of the market that are strongly served by existing financial mechanisms. However, there is a perception amongst business support agencies, venture capitalists and entrepreneurs alike that the size of investments in the formal venture capital market has been increasing and that companies seeking investments above this level, up as high as £2 million, may be restricted in their access to finance. The paper tests this qualitative finding on a number of empirical data sources and finds that there is indeed an "equity gap" of between £150,000 and £1.5 million. It concludes that lack of finance in this area represents a brake on the expansion of high growth potential businesses in the UK.Research limitations/implications -The empirical data covered in this paper are from three large-scale surveys of the adult population in the UK. While this is robust as a reflection of what is happening amongst the whole spectrum of business start-up activity, the methodology was not originally conceptualised as a mechanism for assessing the scale of the equity gap. This evidence was gained from a qualitative survey of actors in the market. Further research should survey high growth potential firms and financiers themselves in more detail to develop the analysis on a more systematic basis. Practical implications -The research will be of interest to policy makers who seek appropriate mechanism for developing a funding "ladder" to support businesses through the growth process. It identifies a clear gap in the market for growth finance that is evidence on which to base funding priorities in the future. Originality/value -Academic and policy attempts to quantify the scale of the equity gap in the UK have been limited by availability of longitudinal and systematic data. As a result, they have tended to be largely qualitative in nature and prone to anecdote. Many of these studies do corroborate the findings reported here, but this does represent a first attempt to provide a quantification of the equity gap and thus should be of interest to policy makers, practitioners and academics alike.

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