Last fall, Allen Kirkpatrick set out to raise $500,000 from an elite subset of private investors: smart ones. He was looking for backers whose know-how could help him grow his $2-million business rapidly. "We would have been very naï ve to think we knew everything we should know to build this business," says Kirkpatrick, president of Epion Corp., based in Bedford, Mass. "We looked for people with the right knowledge."

Some who offered green matter (but no special gray matter) were told, politely, to wait for the next round of financing, according to Bruce Garcia, Epion's chief financial officer. In that first round, Epion raised $775,000 from 12 investors, who now make up its advisory board, which meets quarterly. That brain trust includes expertise in a variety of areas Kirkpatrick and Garcia had targeted, from financing techniques to selling high-tech capital equipment.

Epion's ability to cherry-pick among potential investors is particularly surprising because the company had never raised outside capital before and toils in an unglamorous field. Founded in 1984, Epion started out as a small consulting firm, but in 1990 the company switched to researching two technologies that will likely find their biggest application in semiconductor manufacturing. A few years ago Kirkpatrick began to sense the commercial potential of his research.

Aware of his need for capital and his scant familiarity with the financing world, he hired Garcia as CFO last year. After writing a business plan that called for Epion to raise $500,000, the two realized they needed more than money. "The markets for our technology are pretty sophisticated, and there's lots of competition," Kirkpatrick says. "Getting some really talented help in finding our way through all the crocodiles waiting for us would be a huge advantage."

Then Ken Lazarus, cofounder and CEO of Active Control eXperts Inc. (ACX), a Cambridge, Mass., maker of electronic devices, told Kirkpatrick about ACX's advisory board. "There's tons of private capital out there," available from successful businesspeople, Lazarus explains. "There's a class of people who are very interested in investing and in having a mentoring relationship." So Kirkpatrick and Garcia made up a hit list of around 20 potential investor-advisers. "We asked ourselves, 'What functional disciplines will be important to making this company successful?" Garcia says.

To make the opportunity appealing to investors, the two came up with a sweetener: anyone who subscribed, paying $50,000 for 1,000 shares, would be able to double his or her holdings, at the same price, at any time during the next five years. The first private placement, which began in August 1997, closed successfully on Halloween.

So far, Kirkpatrick says, Epion has been "very pleasantly surprised" by how willing advisory-board members are to help. For example, one day advisory-board member Russ Taskey happened to drop in on Kirkpatrick--and ended up offering advice about a recruiting problem. "You never know how much you know until a small company turns to you," says Taskey, 64, who spent 25 years as a vice-president for human resources. "That's what makes this exciting."