 Paul Welch was just another entrepreneur who dreamt of growing his small business into a big company. Then last year he took a step closer to that dream when Jon Moulton, the venture capitalist who made his name with headline-grabbing deals such as a bailout of Reader's Digest, bought a 10% stake in Welch's Largemortgageloans.com. The deal was worth hundreds of thousands of pounds.  Welch has since doubled his turnover and bought out his partners.  He hopes to float the firm on aIM within three years.  Welch seized his chance when he discovered Moulton was going to be speaking at an industry event in late 2009. "I had only one venture capitalist on my list of people to ask for financing, and that was Jon. I introduced myself, told him I was looking for investors and handed him my business card. Within a month he had done due diligence and agreed to the deal."  as Moulton's investment in Welch's firm shows, investors are still willing to back small firms despite the sluggish economy. Indeed, Moulton joined Welch's venture when the mortgage market was mired in some of its worst difficulty. He said he was attracted by Largemortgageloans' niche of lending to people needing mortgages of more than ?500,000.  "I couldn't imagine the mortgage market would get much worse," Moulton said. "They had found a niche and were doing well in it."  according to figures from the British Venture Capital association (BVCa), there is ?1.5 billion of private money looking for investment this year. So what do entrepreneurs need to do to attract some of this capital? Moulton, who said he gets asked to consider two investments a day, said his approach to investing hasn't changed much despite the downturn.  First, he disbelieves most business plans. "I'm close to exiting a firm I've been involved with for 11 years, on the basis of a business that wasn't even in the business plan," he said. Rather, Moulton focuses on the cost of becoming involved in the project as well as the "dynamics of the sector", the people involved and, crucially, whether the managers are willing to relinquish some control.  Indeed, nowadays entrepreneurs are coming under as much scrutiny as their ideas.  David Glick, founder of Edge Group, which runs venture capital trusts raising money from private investors for entertainment and digital projects, said: "Give me the choice between a first-class management team with a business plan that's still evolving or the best business plan in the world fronted by lesser executives, and I would go for the best people every time."  Last October, Gary Robins, chief executive of Hotbed, the investor syndicate, announced a ?3.4m investment in No Saints, a new venture by Stephen Thomas, who built the Luminar nightclub business.  No Saints will operate high-end restaurants and live music venues, with Robins expecting turnover in the first year of ?10m.  Hotbed raises money from its 900 wealthy members, who each contribute in ?25,000 units for investments of between ?1m and ?5m in a project. It is often considered a bellwether for the venturecapital industry.  "In 2009, support for earlierstage companies fell off the cliff," said Robins, who made his name at 3i, the private equity firm. "appetite came back only last year. In the summer of 2010 we saw the stirrings of people willing to make riskier investments again. Today we are seeing a strong recovery. One thing driving this is that private investors have a lot of assets such as cash, which is giving almost no return because of low interest ra 