SELLING marbles in the playground was an early indication of Mike Rutterford’s entrepreneurial flair.

“I’d win lots of marbles, sell them back to people and then win them again,” said Mr Rutterford, co-founder of Archangels, Scotland’s biggest business angel syndicate. “So it was a virtuous circle of supply and demand.”

The Edinburgh-based network of private investors founded in 1992 by entrepreneur and property investor Mr Rutterford, 68, and Barry Sealey, 80 – the former group managing director of Scottish logistics business Christian Salvesen – now attracts worldwide attention for its investment approach.

“We’ve had delegations from countries like New Zealand, South Korea and Holland looking at what is now known in common parlance as the Scottish model,” Mr Rutterford explained.

“We’re ahead of other countries in Europe and I think one of the reasons that business angels have prospered so well in Scotland in particular is the sophistication of what we do.”

Key to this is co-investment – where angels use their own capital to leverage further funds from other investors, including institutions and venture capitalists. This spreads the risk and significantly increases the amount of funding companies can raise.

In its annual results this week, Archangels noted that it had arranged more than £200 million in investment capital since it was founded in 1992. About half of this is cash from Archangels’ network of private investors – it currently has 70 members – with the rest being raised from co-funders including the Scottish Investment Bank, Scottish Enterprise’s investment arm.

“The type of investment we do is very high risk so we don’t bet the farm,” Mr Rutterford said. “In 1992 when Barry and I started, we did not intend Archangels to become what has been built. There’s been quite a lot of luck. But on the journey we’ve had fantastic support on the board and people have believed in what we’re trying to do to support Scotland.”

Particularly pleasing was last year’s economic impact report from Strathclyde University’s Hunter Centre for Entrepreneurship, which showed that Archangels’ companies had generated turnover of more than £1.3 billion since 1992 and created almost 3,000 jobs.

The syndicate’s 22 current investments include Edinburgh-based NCTech Imaging, which makes 360 degree cameras used by clients including Google, training software specialist Administrate – currently Scotland’s fastest growing tech company – and dental imaging specialist Calcivis, which received total funding of £4.5m last year after a £1.3m investment from Archangels.

“While we might be known for some of the higher value investments that we do, we’re exceedingly interested in proof of concept type funding for small tech companies who might be looking for £50,000 or £100,000,” Mr Rutterford said. “So it’s bright-eyed, bushy tailed new entrepreneurs who are perhaps just coming out of university. They maybe don’t need a lot of money, but we can put in some cash and give them a great deal of support to help that embryonic company make it up the food chain of growth to maturity.”

This ‘from small acorns’ approach has helped to grow businesses like Livingston-based Touch Bionics, which now has 5,000 wearers worldwide of its prosthetic limbs and annual revenues of £15m. Archangels first invested £25,000 proof of concept funding into Touch Bionics 12 years ago and now has around £10.5m in the business.

Of the 80 companies the syndicate has funded, 35 have failed after receiving £15m of Archangels investment. Another 19 exits have returned about 20 per cent, or £110m. “I think about 40 per cent of our companies have gone bust, but we only lost about 15 per cent of our money,” Mr Rutterford said. “It’s not fun when companies go bust and it felt like a lot more at the time.”

Born in Leith, Edinburgh, Mr Rutterford was schooled at Trinity Academy, where he failed to impress his teachers.

Following the example of various cousins, he spent six years in the Merchant Navy, where he enjoyed the applied mathematics used in navigation. Returning to Edinburgh, he set up an estate agency and mortgage broker called Stuart Wyse Ogilvie in 1977 at the age of 29.

“It was probably the earliest stage of really professional selling,” Mr Rutterford said.

He was the first to put “For Sale” and “Sold” signs on houses and sold the business to insurer General Accident ten years later for £16m. He then had the good fortune of meeting Barry.

“We had both done well out of Scotland and agreed four things,” Mr Rutterford explained. “We wanted to put something back and thought the way to do that was to invest in young Scottish tech companies. We also wanted to have fun and to make a pile of cash. A nice footnote is that Barry celebrated his 80th birthday a few weeks ago. If I was as sharp as Barry today, I’d be very pleased. He still invests in pretty much everything Archangels does even though he’s no longer on the board.”

Mr Rutterford has enjoyed the ‘rebirth’ of Archangels with a new board line-up including chief operating officer David Ovens, investment director Niki McKenzie and chief investment officer Sarah Hardy.

“In a way, Barry and I can just slipstream now because we’ve got so much talent in the team,” he said.

The plans for 2016 include new investments and exits; closer engagement with universities and encouraging members to get more involved with early stage businesses as non-executive directors, mentors or advisors.

“We’re very fortunate in our investors group to have a stack of talent and entrepreneurialism,” Mr Rutterford said. “The more we ask them to do, the more involved they get and the more interesting, exciting and fun it could be for all of us.”