One option is the use of passwords that would protect an IPO site so that only authorized investors can enter. All types of offerings and related services are proliferating. By 1997, E-Trade included IPOs as one of its online investment services. Last November, E-Trade sold out its available shares in the IPO of Sportsline USA, underwritten by traditional bankers. Even companies working with conventional underwriters on large deals are using the Internet to make investor presentations before going public.
Web sites supporting the issuance of unregistered securities are also common.
Most provide lists of issuers and access to offering documents. Some, such as Direct IPO, are affiliated with registered broker-dealers. Others try only to match buy and sell orders but do not negotiate transactions. In terms of legal issues, executives must be careful how they distribute information about their fledgling companies. For example, there are different rules for the verbal presentation of material about the prospects for a startup and the written material printed in a prospectus circulated to would-be investors.