WALL STREET HAS been positively delirious over any company that's part of the Internet phenomenon. Companies such as Netscape Communications Corp. and Yahoo! Inc. are now trading at phenomenal multiples of their initial public offering (IPO) prices. Problem is, by the time the little guy can buy shares, the stocks are usually trading in the stratosphere. How to get in on the ground floor of the next hot Internet IPO if you're not a well-connected zillionaire or a fund manager? By going right to the Internet itself.
A Securities & Exchange Commission ruling earlier this year cleared the way for direct IPOs via the Net. Now, a startup in Marina del Rey, Calif., plans to launch a Web site to help raise funding for high-risk Net startups that shun the thought of giving up control and large commissions to venture-capital firms and underwriters. Michael Terpin, one of the founders of DirectIPO, says the Web site will also benefit the small investor, providing information about how such securities are regulated and listing investment opportunities. From there, DirectIPO (www.directipo.com) will link investors to the startups' Web sites, where they can retrieve a company prospectus and, if they like what they see, buy shares without going anywhere near Wall Street.