VCT providers have been told to sharpen up their act if they want the market to develop.
KeyData Mark Owen says the companies marketing venture capital trusts have let clients down by not providing them with information.
He believes that more professional marketing could see the industry progress and help bring more funds under management.
The VCT market hit a peak in 2000/01 when £450m was invested but in the years since then the total has dropped to under a quarter of that figure.
The Government has tried to breathe new life into VCTs in a move that was widely praised by the industry, capital gains tax breaks were increased to 40 per cent of up to £200,000 for two years.
Owen believes that a secondary investment market for VCTs is about to develop as capital is reinvested into Isas and as part of pension portfolios.
He says: “VCTs have been wonderful in their skill of not providing any information at all for investors. As soon as a client does not get any information they get worried. This is why it is important to invest in firms with proper management behind their VCT.
“Other firms are starting to realise that these are the successful VCTs and the have started to sharpen up their act.”