Venture capitalist Piper Private Equity, which backed Sofa Workshop - later sold to MFI - is on the hunt for small retailers with big potential after building a£20 million investment fund.
Retailers, along with leisure and travel businesses, will be the focus for investments of between£1 million and£5 million from the Piper Private Equity III Fund.
Piper managing director Christopher Curry said: 'We're interested in established businesses, not start-ups, but they can be relatively small.
It is about growing a retail brand as well as a retail chain.'
Piper's fund has just received 'significant commitment' - understood to be in the millions but less than£10 million - from Graphite Enterprise Trust.
Curry said: 'Graphite has already invested in a quite a lot of retail companies, especially the larger ones, and has been very successful. It now wants to retain an interest in the smaller businesses that have a lot of growth potential.'
Earlier this year, Graphite was behind the£70 million buy-out of women's fashion retailer Jane Norman.
Curry added that Piper Private Equity III Fund has already invested in a 'fast-growing clothing retailer'. Other recent investments include the£42 million buy-out of electronics chain Maplin.
Piper is also an investor in mail-order firm Boden.