Trade Promotions Minister Digby, Lord Jones of Birmingham has given his backing to the work of Investbx, the regional shares and investment facility.
Speaking at a lunch for business leaders and entrepreneurs, Lord Jones, who earlier this year became a Minister of State in the Department for Business, Enterprise and Regulatory Reform, said: "I believe passionately in the kind of work that Investbx is doing.
"The 21st century is all about the development of ideas and the exploration and transfer of knowledge. The only way that a developed economy will succeed in a century which will otherwise belong to Asia is to recognise this fact and act on it."
Lord Jones, the former director general of the CBI, said that Birmingham and the West Midlands had long been a centre for ideas.
"It is vital that we support clusters of entrepreneurship, with money coming together with ideas," he said. "This is why I welcome what Investbx is doing, lining up the ideas with the cash that will turn them into successful businesses."
Investbx, which is the first of its type in the UK, is working with a number of companies, some of which are likely to be admitted to the exchange in an initial public offering and fund raising.
Investbx chief executive, Sue Summers, said: "Our aim is to dismantle the financing barriers that have been stopping West Midland businesses from developing and growing.
"High quality emerging businesses are often frustrated by difficulties as they seek to move beyond initial rounds of equity finance and bank funding.
"By providing an online regional trading platform, combined with a local presence, we will be offering businesses a straightforward and viable route to raising growth capital, at the heart of which is the ability for investors to trade their shares."
Investbx expects to be a user friendly alternative to private equity, with member companies raising up to £2 million of equity through this route.
Ms Summers said: "The new forum is going to play a key role in working with companies to secure their additional finance, as well as ensuring that it is cost effective for them to participate.
"Companies who participate in Investbx will be interesting to many local investors and the businesses involved will receive a huge boost.
"We are confident that in the months ahead, we will be showcasing some companies with great potential and providing investors with high quality investment opportunities."
Many SMEs are finding that private equity firms are not interested in offering relatively small injections of equity finance and this has resulted in the so called "equity gap".
Ms Summers went on: "Having exhausted or outgrown initial equity finance options and found that further lump sum private equity cash is either unavailable or would involve unacceptable dilution of ownership, there comes a time when a decision must be made to develop the business further, or sell.
"This is where we have the potential to encourage the development of the businesses by providing essential cash through investors brought together with the company by Investbx."