Although regional securities firms such as Johnston, Lemon or Ferris lament that sometimes a local company gets too big for them to handle, some companies are so small that their financing needs are too tiny for the regional firms to get involved.

Those are the companies who go to any one of a number of smaller investment firms, such as Wachtel & Co.

The small Washington securities firm, headed by Sidney Wachtel, is "an investment banker, financial counselor and adviser to small companies or companies that are just emerging.We don't want to stay with them when they get bigger," Wachtel said.

Wachtel specializes in tiny technology firms and data-processing firms. The climate hasn't been good for newly emerging firms, but in the past three months the environment has changed sharply.

"There are not too many firms like ours that are willing and interested in speaking with people who either wish to start up a company or want to do something with a company that is six months to a year old and running into problems that they always interpret as financial," Wachtel said. "It's usually not a financial problem: 98 percent of the time it's a management problem.

"Our job is to convince that man that, while he may know his product, he is not a chief executive officer. Our job is to find an individual who is."

Unlike most investment bankers, who find capital for a company for a fee, Wachtel prefers to be paid in stock or warrants. Usually Wachtel finds the captial through some sort of private placement; the company has not done a public offering in more than a decade.

"Sometimes I think they're closer to a venture capital operation [firms that specialize in giving their own seed money to small companies] than an investment banking firm," said one local securities official. "Wachtel serves a unique niche in the capital-raising market."

The firm has only six full-time employes, including Wachtel's daughter, Wendy, now in her mid-20s but who at 16 was the youngest registered broker in the country.

"Our business is very risky. We don't get paid off for years. Most of the time there is no payoff. But when there is a payoff, it's a big one," Wachtel said.