Online Investment Bank Rebels Get a New Cause

In investment banking, as in e-commerce, catering to consumers over the Internet just isn't enough anymore.

Online investment banks such as Wit Capital (WITC Quote) started out with a sort of idealistic notion that individual investors ought to get more of initial public offerings , in which companies raise money from the public by issuing stock. Technology would let the firms bring deals to more investors at lower costs to the issuers.

What Wit and others, including well-bred newcomer Epoch Partners, have discovered is that individual investors alone don't have the firepower to make an IPO work. As a result, the banks have had to adjust their businesses to Wall Street's established IPO structure by developing institutional sales and research units. ...