Why a Dutch Auction?
While the Dutch auction is a preferred format for many fixed income products, very few equity offerings are underwritten in this manner. WR Hambrecht & Co. developed a Dutch auction format for Open IPO, an online underwriting technology developed in the height of the Internet boom and .com craze. WR Hambrecht’s Open IPO in 1999 was going to revolutionize the equity underwriting business. William Hambrecht was one of the two founders of Hambrecht & Quist (later acquired by Chase Manhattan), that created one of the major high technology investment banking boutiques that funded the Internet boom. After the Chase acquisition, Hambrecht left. William Hambrecht believed that the underwriting process was inherently unfair. It was dominated by large investment banks and institutional investors who benefited from keep banking fees high, and distribution centralized. This had the impact of capping the amount of money raised by companies, and keeping shares out of the hands of individual investor
