Can Silicon Valley break the IPO?
Moritz cites the story of Bill Hambrecht. Hambrecht was a lion of San Francisco’s old Wall Street. He co-founded Hambrecht & Quist, the investment bank that underwrote offerings for Apple, Netscape and Amazon.com, among many others, before it was sold to Chase during the dot-com boom. He attempted to upend the initial public offering process at his newer firm, WR Hambrecht & Co.
Hambrecht’s OpenIPO promised a fairer distribution of shares, using a Dutch auction method which attempts to match supply and demand more transparently than Wall Street’s traditional techniques, which mostly involve a lot of insidery favor-trading, followed by a lot of hand-waving about “building the book.”