Research by Professors Colin Mason and Richard Harrison over the past 25 years has played a crucial role in stimulating business angel investment worth £750 million a year in the UK and ensuring government support for this key source of entrepreneurial finance.


  • Professor Colin Mason and Professor Richard Harrison’s research has influenced business policy in the UK and elsewhere to support angel investment for small and medium-sized enterprises.
  • The researchers have promoted best practice in investing and supporting entrepreneurs to become 'investment ready', ie to meet entrepreneurial criteria for investment.
  • Their proposal for business angel networks (BANs) was adopted in 1991 by the UK government in five pilot projects. The Department of Trade and Industry subsequently requested a best practice guide for the formation of BANs (around 40 were subsequently created), and adopted their proposals for investment readiness programmes.
  • As a result of their research, the Organisation for Economic Co-operation and Development (OECD) and World Bank have also adopted the idea of ‘investment readiness’.
  • The research evidence influenced the introduction of tax incentives for business angels in the UK government's 2001 Budget.
  • Mason and Harrison produced a review of angel investment activity for the Department for Business, Innovation and Skills which led to the 2012 Seed Enterprise Investment Scheme, providing tax incentives for small enterprises and start-up businesses.

"There is no doubt that the work of Colin Mason and Richard Harrison over the past 20 or more years – starting with their 1990 paper on 'Informal Risk Capital in the UK' – has been one of the key drivers behind the emergence of angel funding. It provided the conceptual framework to justify intervention on the part of government." (David Gill, Managing Director, St John's Innovation Centre, Cambridge)

About the research

Unheard of in the UK prior to 1990, 'business angel' is now the commonly used term to describe wealthy individuals who invest their personal capital in small businesses (typically start-up or early stage) in return for an equity stake. The term was first introduced to the UK by Professors Richard Harrison and Colin Mason 25 years ago following their study of informal risk capital.

"Our study was the first to identify the importance of business angels as a key source of entrepreneurial finance to support new and growing ventures in the UK," explains Professor Harrison.

Since 1990, their work has proved hugely influential in promoting the concept of angel investing among wealthy individuals, helping entrepreneurs understand what investors look for in a business plan and  influencing the introduction of policy measures to increase the supply of angel finance.

Recently, their ongoing programme of research has highlighted an evolution in angel investing. "In the 1990s business angels tended to invest individually or with a few friends," Professor Mason points out. "Now, we are seeing the demise of angel networks and the emergence of managed angel groups where angel investors work together in order to diversify risk. Through our work, we aim to help both policymakers and entrepreneurs understand the implications of this significant transformation in angel investing."