In the rush to make deals, many venture capitalists give the money and run. But now, some venture funds are going back to building companies by injecting start-ups with their own management expertise, an approach they say is helping them raise money from skittish investors who see more and more start-ups falter.

A new venture capital firm in Los Angeles, Julian, Cole and Stein, raised close to $40 million to invest in 20 companies over the next four years. The firm's biggest selling points were the partners' experience in running small companies, and their plan to invest primarily in southern California. Using a similar approach, Hill, Keeley & Kirby, a venture capital fund in Boulder, Colo., raised $40 million last year to add a second fund to the $12 million it already has invested in 14 companies.

"We think there's a much greater likelihood of getting higher rates of return taking this approach," says Jim Julian, of Julian, Cole and Stein. "We don't believe in the parachute philosophy, that you just parachute into a board meeting once a month while flying around the country making deals."

Aside from providing money and filling board seats, these venture firms provide expertise in such areas as marketing and financial controls. For example, Julian and his partners helped a start-up plan a trade-show presentation, then accompanied the founders to the show. Rainier Venture Partners, a $25-million fund in Seattle, brought one of its start-ups together with its first major customer, and found executives for several other companies.

This hands-on approach has its draw-backs. The venture partners have less time to assess new proposals that reach their desks, and day-to-day conflicts with company founders are more likely. In the end, though, the venture capitalists expect the cork to pop more frequently at successful public offerings, which should soothe any frazzled nerves.