Silicon beat posts the question Where are the boutique VCs? quoting the lack of funding available a the $1million level in the valley. This same issue plagues the UK.
A recent article in Real Deals refers to the equity gap in the UK and the measures taken to address this problem. Angels are expected to shoulder the high risk and get in the trenches with the entrepreneurs.
London Seed Capital is directly involved in this area- actively sourcing business angels with relevant skill sets that can get involved in the very early stages of development. The GLE (London Seed Capital’s parent) is also a managing partner of one of the new Enterprise Capital Funds which are “loosely modelled on Small Business Investment Companies in the US, but with the wrinkles ironed out”.
I’ll post separately about the Enterprise Capital Fund separately.
Jason Ball 
Thanks for your posts giving more details Seraphim. Thought you may find Bessemer Ventures website of interest. They have what’s called an Anti-Portfolio – it’s hilarious and demonstrates what angels/early stage investors can achieve if they have some more foresight!
http://www.bvp.com/port/anti.asp