DR. COLIN MASON IS READER IN ECONOMIC Geography, University of Southampton, England, and Richard Harrison is Professor of Management Development at the Ulster Business School, University of Ulster, Northern Ireland. Despite the rapid growth of studies of the informal venture capital market, knowledge of why 'business angels' reject investment opportunities remains highly generalised. In contrast with the investor focus of previous studies, this study adopts a dealspecific perspective by examining a sample of 35 investment opportunities that were considered and subsequently rejected by Metrogroup, a private investor syndicate in the United Kingdom. The paper refines and extends knowledge of 'why angels say no' in three respects. First, most investment opportunities are rejected for just one or two reasons. Second, the most common reasons for rejecting investment opportunities are associated with the entrepreneur/management team, market and marketing factors, and financial factors; a flawed or incomplete marketing strategy and flawed or incomplete financial projections are particularly significant deal killers, especially at the initial review stage. Third, with some specific exceptions, deals rejected at the initial review stage tend to be on the basis of the cumulation of a number of deficiencies rather than for a single reason.
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