It happened early last spring, not during Yuletide, but William Z. Fox, a hard-driving 38-year-old Baltimore auctioneer, suddenly found he'd become a real live angel.

There weren't any halos or anything. Fox became a Broadway "angel" -- one of those high-risk investors who put up the cash needed to bankroll a big New York stage production. And he did it for only $1,250.

Last week, Fox and 174 coinvestors got an unexpected Christmas present: A notice that not only would they recover their entire initial capital, but they'd be reaping substantial profits -- probably well into 1981.

Although not all Broadway investments prove quite so heavenly, Fox is on of a growing number of small-scale angels -- or maybe only cherubs in view of their modest outlays -- who are putting their money into theatrical productions.

Alexander H. Cohen, the Broadway producer who put together the package that attracted Fox and other investors like him, declares flatly that the legendary Broadway angel -- a single high-rolling, cigar-smoking bankroller -- is passe.

Instead, faced with mounting costs, producers have broadened their fund-raising efforts over the years to include motion-picture firms, record companies, music publishers, theater owners and large public investors.

Their latest attempt at expansion -- and the one that enticed Fox and other previously unlikely angels -- has been to advertise openly for small investors in publications like Variety and the Wall Street Journal.

Begun 3 1/2 years ago by Harold Prince, another Broadway impressario, the solicitation of investors through newspaper ads has made the Great White Way accessible to thousands of small-scale angels who never got the chance before.

"We get a substantial number of small investors through these ads," Cohen says. When you include the record and movie companies, which also take that same route, he asserts, "virtually 100 percent of our financing is public."

For the littler angels, the ascent to Broadway investments comes most frequently as a lark. Many are ardent theater buffs who simply want to get closer to the smell of greasepaint. The profit is secondary -- and often elusive.

Stephen Fisher, a Montvale, N.J., orthodontist, says he responded to Cohen's ad "strictly for fun" because "I wanted to find out what it would be like to see a show in terms of having been a backer."

Unabashedly bitten by the theater bug as a sixth grader just after World War II, Fisher, now 47, says his own experience proved to be "a theater-buff's dream -- absolutely unbeatable. It was terrific just to see the mechanics."

Besides the chance of turning a profit, cherubs get to attend a special backer's audition, see the opening-night cast party, meet the stars if they want to and get no-hassle tickets for other shows -- though still at full price.

Under Cohen's operation, they also receive a souvenir cast album recording, a playbill and poster for framing and a periodic newsletter. And if an investor wants to chew the fat about the theater, Cohen seems readily available.

Concedes James Conley, a New York broadcasting executive who took the plunge with a $10,000 investment in the same show: "It's been a little bit of an ego trip. It's fun."

Fox got his start as an angel by responding to Cohen's ad in the Wall Street Journal last March. "It was a chance kind of thing," he says. "I'd never done anything like that before. And the numbers didn't seem that impressive."

Two weeks later, he got a call from Cohen. "He called me on a Friday," Fox recalls, "and over the weekend I decided to invest, mainly because he seemed to feel he needed the money enough to call me. Sometimes you just hit it off."

What Fox actually did was to subscribe in a limited partnership designed to raise $400,000 for an untried production of "A Day in Hollywood/A Night in the Ukraine," a musical about the Marx brothers.

Fox's own initial outlay was to be $1,000, and the contract provided that Cohen could legally demand another $250 later -- a device known as an overcall -- if he found that he needed more.

By Fox's own choosing, he invested his money sight unseen -- without flying to New York for a backer's preview. But a few weeks later, when the play came to Baltimore for a pre-Broadway stint, he was sure he'd made a mistake.

"To put it mildly, the show had some problems then," he recalls. "I thought it was the worst turkey I'd ever seen, and I was certain that my investment would prove to be a loss. I was ready to write it all off."

To Fox's delight, however, Cohen ordered some revamping, and the production opened on Broadway to virtually unanimous rave reviews. Within a few days, it was sold out for months ahead. And it's still running SRO.

In September, Fox, Fisher and the other angels received checks for the first $250 of each $1,000 they invested, followed by three additional installments. The final $250, to cover the overcall, should arrive this week. i

"Based on the indications we have," Fox exults, "the show is grossing an average $130,000 to $140,000 a week, which means a combined profit of $35,000 to $40,000 a week for the 175 investors. And it could go on for months."

But experienced angels warn that not all Broadway productions rain dollars from heaven on their investors. One insider cautions that only half even yield a penny's profit.

Indeed, industrywide, losses are up sharply -- to an aggregate $11.8 million in the fiscal year that ended last May 31, up from only $2.1 million the previous year, according to figures from the New York attorney general.

Among the big money-zappers: "God Bless You, Mr. Rosewater" lost $402,000; "Canterbury Tales," $203,000, and "Father's Day," $189,000. And cost are going up: to $343,547 for an average drama and $1.05 million for a musical.

"It's really a calculated risk," cautions one wary investor who's far from sure that he'll ever repeat his foray into the show-business world, even though the investments are covered by Securities and Exchange Commission rules.

And many successful angel are reluctant simply to wing it again: "There's no particular reason why I would jump at the next one," Conley says matter-of-factly. "I don't feel as though I'm hooked."

There also have been reports of some small-scale investors who've become miffed at the offhand way they feel they've been treated by producers, either brushed aside at backer's previews or just plain ignored at cast parties.

Fox, Fisher and Conley didn't experience any such rebuffs. But then, they all concede they didn't really expect to be treated like the angels who were portrayed in the 1930s movies.

Sums up Conley: "There really isn't a comparison. Despite our success here, I don't think you invest in Broadway productions as a business venture. I think you really do it mostly for fun."

Meanwhile, the 175 backers of "A Day of Hollywood" are spending the Christmas holidays in a decidedly more festive -- and optimistic -- mood than most Broadway angels: They're looking forward to happy returns in 1981. t