When J-Bird Records needed to raise capital last year to fuel its growing business, the start-up company wasn't necessarily looking for an investment bank that made money the old-fashioned way.

And it wasn't a surprise when J-Bird, a pioneering Internet recording label, rapped a 29-year-old, one-time rock musician named Craig Kaufman as its investment banker. "Craig's knowledge of the music business and the fact that he had been a musician helped sway my decision to use Kaufman Bros.," explains J-Bird Chief Executive Jay Barbieri. Such harmony is what a small band of newer investment firms in New York are seeking in carving out a niche targeting nascent technology-based businesses. Aiming at deals mainly under $15 million, these digital bankers are eyeing a clientele beneath the radar of the big investment banks but above ground level in terms of financing.

Finding and keeping promising clients in a hot technology market isn't easy, and the big investment banks remain formidable competitors in the quest for the best deals. But so far business is brisk for most of the newcomers.

"I'm swamped," says Laurent Ohana, managing director of Manhattan-based New Media Capital Inc., which is just 18 months old. Mr. Ohana, who previously was an associate at the Wall Street law firm Fried, Frank Harris Shriver & Jacobson, says he is inundated daily with calls from would-be entrepreneurs.

Mr. Ohana, who typically handles deals under $5million, says he ends up representing only about 20% of the companies that contact him and invests in perhaps 1%. Last month, he represented Manhattan-based N2K Entertainment, which is an on-line entertainment company, in an agreement with Grolier Interactive to launch a French version of N2K's on-line music store called Music Boulevard.

The experience of Mr. Ohana's highlights the demand for financial backing and advice among technology star-ups that might not get the time of day from more established institutions. One of the selling points of the new media bankers is that they mirror the young, entrepreneurial class they're targeting.

"We're relatively new at this but we're young and aggressive, and we're getting better and better connected," says Richard Mgrdechian, a partner at Renwick Capital Management. Launched in 1995 by a trio of recent Columbia University business School graduates with $500,000, Renwick now boasts $15 million in capital under management. The firm operates both a hedge fund and a private placement fund, and its clients include ETM Entertainment Network Inc., which sells tickets through electronic kiosks, and Seattle-based Carver Corp., which makes high-end sound systems.

Renwick partner Raj Bhatia points out that both he and Mr. Mgrdechian have undergraduate electrical engineering degrees. "We have the ability to assess deals and know whether they're going to make money for us," he says.

That same blend of youthful energy and market savvy is working for Kaufman Bros., too. After starting the company in August 1995, Craig and Robert Kaufman have built a 38-employee firm in New York that provides market research on high-tech companies to institutional investors and investment banking services to growth companies.

"A lot of the technology people here have worked in start-ups," says Craig. "It's what we love to do."

Wilton, Conn.-based J-Bird was impressed enough with the firm and Craig's own background in the music business to hire Kaufman Bros. To handle a $6 million private placement and a $1 million bridge loan this year. For a $600 production fee, J-Bird markets unsigned performers at its Web site and presses compact disks of their music that can be ordered on-line for $10.98. Mr. Barbieri, who founded the company last June, says it's already profitable and predicts the label will sell 3.6 million CDs in 1997.

Like himself, Mr. Barbieri says the Kaufmans "are growing up with (the technology) as it happens as opposed to someone who's been around more and thinks maybe it's too risky." But the small technology bankers are not operating in a vacuum. When it comes to landing hot clients, they face competition from high-tech oriented California-based investment banks such as Hambrecht & Quist and Robertson Stephens, and even from Wall Street's old guard.

"It's tough for us to get in the door sometimes when we really want to," says Renwick's Mr. Bhatia.

For six months Mr. Bhatia pursued Vicinity corp., a Palo Alto, Calif.-based supplier of mapping services on the Internet , trying to invest $1 million. But when he finally caught up with Vicinity's chief financial officer at an Internet trade show a few months ago, he was told the company already had on board big-shot investors like Neil Weintraut, a principal at San Francisco-based 21st Century Internet and former head of Hambrecht & Quist's Internet practice. And when N2K did a $16 million private placement last May, it turned to Allen & Co. N2K Vice President John Diamond calls Allen "the most powerful media and entertainment investment banker on Wall Street"

"They raised the money for us in two days," says Mr. Diamond. Despite brushes with banking's big boys, New York's boutique investment firms aren't confined to defending their own backyard. Morgen, Evan & Co., for instance, focuses on negotiating deals between Japanese corporations and growth companies that are located in the tri-state area.

"We can bring the large Japanese companies to the table as investors or joint venture partners," says Mark Lerner, who started Morgen, Evan in 1992 after heading up Japanese corporate financing at Chase Manhattan Bank and Merrill Lynch & Co.

His company, for example, engineered a strategic alliance between Mitsubishi Electric Corp. and Montvale, N.J.-based Geotek Communications Inc. that has helped increase the wireless company's market capitalization to $500 million.