Research excellence at Glasgow

Entrepreneurship is a driver of innovation, wealth and job creation. Professor Colin Mason’s research establishes the conditions under which businesses start and scale-up, and identifies mechanisms to support the emergence of high-growth firms—such as angel investing. Mason’s work with angel capital associations has shaped practice and engagement with policymakers, stimulating investment activity in the UK and internationally.

The research

Policymakers across the OECD are strongly focused on promoting high-growth firms (HGFs). However, existing approaches aimed at promoting HGFs are proving ineffective.

The entrepreneurial ecosystem approach, which recognises that HGFs require distinctive types of supportive environment in order to flourish, has emerged as a response.

An important driver for the emergence and growth of entrepreneurial ecosystems is the process of ‘entrepreneurial recycling’. Entrepreneurs who have built successful companies remain involved in the ecosystem, reinvesting their wealth and experience to create more entrepreneurial activity.

Many become business angels, providing funding for new businesses and contributing experience through positions on the board of directors. However, the ability of angels to exit their investments in order to reinvest is a further critical recycling process.

Mason’s research has focused on the exit stage—the stage at which investors derive their financial gain—and found that while most angels assume that good investments will find an exit, most exits are planned rather than opportunistic.

An ‘exit-centric’ approach is, therefore, key to successful entrepreneurial recycling.

The impact

Professor Mason’s research has directly informed national and regional policies and practices in the UK and internationally.

His research was crucial in introducing and promoting the concept of ‘investment readiness’, resulting in the development of programmes to address the knowledge and skills gap.

The effectiveness and sophistication of these programmes was enhanced by subsequent studies, which contributed to the fact that angel investments in Scotland increased from approximately £27m to £64m between 2013-18.

Mason’s research has also played a key role in raising the profile of business angels among policymakers and investors in Canada.

With the support of Professor Mason’s policy recommendations, the Government of Canada created the Women Entrepreneur Fund to support female and indigenous entrepreneurs. This $30 million fund was fully allocated in 2019 and supported 320 female-led businesses.

With support from Mason’s research and the Canadian Government, the number of angel group investments increased from 283 to 583 between 2015-18.