The puncturing of hi-tech stocks may have taken the froth off thefrenzied dot- com start-up market. But the perception remains thatbright young management consultants only have to whisper the words"internet" and "new company" and venture capitalists will beat a pathto their door.
Jason Purcell is convinced this is a myth. "Despite all the dot-com millionaire stories, the odds are stacked against both theinvestor and entrepreneur without family or City connections," hesays.
He is in a better position than most to know. With his wife, HazelMoore, he is not only an investor in technology start-up firms buthas just launched a venture, too. FirstStage Capital, which openedfor business last week, aims to improve the odds by providing "afaster, more effective service for the entrepreneur looking forfunding of pounds 50,000 to pounds 1m".
FirstStage Capital does not claim to be the only service seekingto link cash-hungry fledglings with wealthy individual investors - or"business angels". But its founders claim they are different. Otherservices, they say, tend to be regionally based and lack the criticalmass to generate opportunities; or, they tend to be national groupsaiming at firms wanting larger sums of money, typically pounds 5m ormore.
Their idea, by contrast, is to use the internet to allow investorsanywhere in the country to back new businesses. Conscious that thereare many more people prepared to invest amounts of pounds 20,000 orso than are registered with the various networks, Ms Moore and MrPurcell see huge potential this way for bringing together people whowould have found it difficult to meet. Until now, most entrepreneurshave found business angels via personal contacts or advisers. Butenterprises have not necessarily found the most suitable angels, andwould-be investors have not enjoyed the widest choice of companies toback.
By making the most promising opportunities available to investorsanywhere in the country instead of those "in the know" in the City,FirstStage Capital's founders - previously financial analysts in theSquare Mile - believe they are levelling the playing field.
The idea sounds simple enough. But they say it has been somethingof an onerous task putting it into action. For one thing, the companywas incorporated last November, with Ms Moore as chairman and herhusband as chief executive, but approval from the financialregulator, the Securities and Futures Authority, did not come untillast Thursday.
The couple, along with the team they are assembling at officesjust off Oxford Street, are confident, however, that they can helpbridge the notorious funding gap experienced by UK start-ups
An additional attraction of FirstStage Capital is a service thatenables investors to investigate opportunities online without havingto reveal their identity. "Privacy and security are very important tous," says Ms Moore, who thinks many would-be private investors areput off registering with networks for fear of being inundated withrequests for funds.
The internet route also means a personalised service. Havingregistered, for a fee of about pounds 300, each angel receives a"microsite" tailored to his or her preferences. They are asked togive their available funds (the minimum is pounds 20,000), theirtrack record as an angel, their business experience, whether or notthey want to join a syndicate, or be involved in the business, theirgeographical preference and areas of interest.
When angels log on to the site they get access to suitableopportunities, which they can investigate by emailing the individualentrepreneurs.
FirstStage Capital says it is offering more than a matchmakingservice. "We're adding value, analysing the proposals - only qualityproposals get put up," says Ms Moore.
To be considered, entrepreneurs submit their business proposition,paying a fee of about pounds 200. The process involves start-upshaving to think carefully about their business prospects andprioritise their needs. FirstStage does an analysis, the foundersworking with two others and technical adviser, Marko Balabanovic, aStanford University PhD with extensive experience of Silicon Valleytech firms.
Accepted proposals fall into two categories. The best go on to theShowcase site. Those that Ms Moore classes as "not world beaters butquite interesting" go to the Marketplace. They remain listed for upto six months, or until they receive the funding they need.
The plan is for the website - www.firststagecapital.com - to giveaccess to professional advisers, such as lawyers and accountants, toprovide online advice. FirstStage has formed a partnership with theCity solicitors Cameron McKenna, a move that Ms Moore says willsignificantly enhance the company's offering.
The overall aim is to boost the chances of hi-tech start-ups andenable more investors to participate in the earliest stages of thenext generation of internet-related success stories. "We're lookingfor genuinely unique and innovative proposals, at people who haveideas, who are starting out - and, hopefully, creating the nextYahoo," says Ms Moore.
