The former Dragons' Den star added that he thought the TV show "has had a very positive impact on entrepreneurship and people who are thinking of starting businesses".
"I think the fund is a good idea, but the threshold should definitely be lowered," said Caan about the BGF. The issue here is that most businesses that fail, fall well below the fund's threshold of minimum £10m in revenues. The main investment gap, also known as the 'equity gap', exists between £250,000 and £2m."
Caan, who heads up private equity firm Hamilton Bradshaw, spent four years on the Dragons' Den show investing in excess of £1m in new businesses. He thought the show had brought business to a wider audience and said: "It inspires and empowers young people to think differently about starting business."
"I get inundated with calls and emails from budding entrepreneurs pitching me their businesses at my private equity firm, Hamilton Bradshaw," he added.
"One element I have noticed with these proposals, is that, with the popularity of Dragons’ Den, business plans and business models have become more developed and complex.
"From what I've seen more and more entrepreneurs are interested in equity financing, and also, their business proposals and forecasts are becoming more realistic and relevant."
And Caan, who has worked with banks on different funding initiatives, said budding entrepreneurs needed to know the difference between what banks could offer and angel investment.
"People need to be clear that securing funding from a bank is completely different to getting investment from a business angel," he said.
"The banks are only interested in risk-averse opportunities and usually expect some sort of security against their funds.
"Business angels, being entrepreneurs themselves, will typically accept a level of calculated risk, because they know their involvement will reduce that risk. That said, I think angel investment has become more and more significant, due to the fact that the recession has created more risk throughout a range of markets and businesses."
Asked about a recent report from Ernst & Young revealing that 45 per cent of entrepreneurs start their first business over the age of 30, Caan said passion was the key ingredient for success: "I think, for an entrepreneur, business experience is always a welcome factor.
"However, since being an entrepreneur involves a whole range of skills, from developing and selling a product to writing out cheques and everything in between, I believe it is more significant to be passionate about learning from business experience, than actually having the experience."
Last month, Caan launched the Business Secrets app for smartphones, providing advice on topics such as raising finance, leadership and managing growth.