When Queen Isabella provided Christopher Columbus with ships, men, and money, it is said, venture capital was born. Others date the inception considerably later -- such as when the Rockefeller family backed Captain Eddie Rickenbacker to start what was to become Eastern Air Lines Inc. But whatever the official date of birth, wealthy families have long provided would-be entrepreneurs with the wherewithal to get their enterprises off the ground. And venture capital has been correspondingly regarded as the investment preserve of the very rich.

No more. It is not, to be sure, a field that the just-starting-out investor can easily or safely get into (see following article, page 146). But for people who have made some money, want to make some more, and have a taste for the long shot, venture capital investing can be both lucrative and engrossing. The opportunities for entering the field, moreover, are proliferating.

The most common opportunity for businesspeople is the new company down the road -- and the most common sort of venture capitalist usually doesn't think of himself as one. "My class of guy is called an angel," explains Don Kramer, president of Flendrix Electronics Inc. in Manchester, N.H. "An angel is just a guy that's got a little money, knows a little something, and is willing to take a flier."

Since coming to Hendrix five years ago, Kramer has taken fliers on eight young companies involved in electronics-related manufacturing. Most organized venture-capital funds, he points out, can't afford to get involved with an enterprise at the earliest stages, nor are most willing to put in the relatively modest investments an entrepreneur needs just to rent an office and hire a secretary. That is where the angel comes in. "I put money into some of these deals before they have a business plan," says Kramer. "I do it because I like the people and I like the idea they're talking about."

Kramer finds most of his deals through friends and business associates. That, says a study by University of New Hampshire professor William E. Wetzel Jr., is precisely how most business angels operate. They look for companies that are close to home and that are in fields where they feel "some technical competence." Like Don Kramer, who sits on the boards of all the companies he has invested in, they expect to be active investors.

"Active," however, need not mean "big" Kramer has put as little as $5,000 into a company; that one, he reports, earned him 40% on his money. But his typical investment is closer to $25,000, and, he advises the prospective angel, "you ought to be mentally prepared to pop another $25,000 later on." Wetzel's study turned up an average investment of $50,000 among the 133 angels he surveyed. Still, about one-third of the total investments made by this group were under $10,000.

Traditionally, the organized venture-capital business has had little in common with informal investing of the angelic variety. Venture funds typically required minimum investments of $1 million or more and mostly sought insurance companies and pension funds as partners. That put them off limits to individual investors with anything less than Rockefeller-size fortunes.

In the past few years, though, the burgeoning number of start-ups has stretched the venture industry beyond these limits. From about $2 billion in invested capital 10 years ago, the business ballooned to upwards of $11 billion last year. Many of the enterprises it financed proved successful -- and each success created a new group of people with the money, experience, and interest needed for serious venture investing. All these successes also gave venture capitalists an enviable track record, with funds averaging a compounded annual return of about 25% over the life of the venture capital partnership, generally 8 to 10 years.

As investors flocked to get in on the action, two new kinds of funds -- both geared to individuals -- have joined the older, institutionally oriented partnerships. One variety is packaged by brokerage houses, and is open to anyone who can qualify for a medium-risk investment of upwards of $100,000. The New York investment house of Drexel Burnham Lambert Inc., for example, has put together three such funds, the most recent of which was due to close in late February. Butcher & Singer Inc., a Philadelphia-based brokerage firm, is assembling a fund with an eye toward capitalizing on venture opportunities in the Mid-Atlantic states. Brokerage-house funds are big -- Drexel's latest fund is in the $25-million range -- and typically focus on second- and third-round financings.

The other newcomer is, more than anything else, an attempt to institutionalize and broaden the kind of venture investing usually done by angels. These funds -- organized mainly by independent venture capitalists, many with operating-company backgrounds -- typically look for start-ups. They also look for investors who, like angels, can offer them contacts, advice, and the benefits of their experience.

"The new early-stage seed funds very often try to involve as many successful entrepreneurs as they can," explains Stanley Pratt, editor and publisher of Venture Capital Journal, a trade publication. "More than their money, the funds are looking for the expertise [entrepreneurs] can bririg to the market."

Entrepteneurial investors buying into such funds can expect to pay less for the venture capitalists' services than they would by investing through a brokerage house. They can also expect to be more actively involved in the funds' endeavors. Boston's Eastech Management Co., for example -- one of the biggest and best-known organizations in this branch of the business -- has no front-end load and charges only a 2% annual management fee, as opposed to the 2.5% that is standard in much of the industry. But the reason, says general partner G. Bickley Stevens II, is that he expects more from the high-technology executives who are his partners. "If we had passive players," he adds, "we would charge them more."

Despite these differences, all the new funds can be evaluated by similar criteria. Rarely, indeed, is evaluation more important. Venture capital is inherently risky, and none of the funds offer much in the way of liquidity.

That fact alone, says Pratt, puts a premium on personal chemistry. "My feeling is that it's a qualitative decision. If you're going to be married to somebody for 10 years" -- the length of time most partnerships run -- "you better like him."

Another thing to look for, says Pratt, is experience. "Venture capital may be the last of the apprentice industries. What the venture capitalist brings is that he's been through it before." Experience is more important, according to Pratt, than rates of return. "The fact that they've had a reasonably good performance is fine, but that doesn't mean you should pick the guy that had the best rate of return. A great deal of that can be luck."

Finally, check out the structure of the venture firm itself. A well-known name, be it a brokerage house or a venture fund, is no guarantee that knowledgeable people will be running the show. "This is a business where you cannot have the normal structured management layers," Pratt-says. "The guy working with the entrepreneur can't be a fresh young Harvard Business School graduate. He has to be the guy with the experience."

Don Kramer, for one, feels that venture capital partnerships are "a great investment." Still, he is not about to give up the role of angel for that of a supporting player. No venture fund, he points out, can get in as early as he can, so he is bound to get a better deal.

Most of all, though, he is not content with the one-step-removed role of the venture capitalist. "The reason I do it on my own is that I don't have enough free cash that I'm willing to let someone else invest. Besides, I'm an entrepreneur. I want to be too close to it myself."