3c hapter - Index of

The Do- It- Yourself Public Offering 189
statements on the site to help inform buyers and sellers. Klein
banged together a simple site he called Wit Trade and, displaying
his newfound media savvy, cranked up the promotional machine.
A party to launch the “ fi rst- ever digital stock trading mechanism”
drew scores of journalists and TV crews.
“I didn’t anticipate the potential people would see in the
idea—how this little company stumbled into a method that, taken
to its logical extreme, could radically change the way stocks are
sold,” Klein told Inc. magazine in one of his many press interviews
at the time.
Nor did he anticipate the reaction of the SEC, which saw
Wit Trade as a dangerous experiment that could disrupt the status
quo. The SEC wanted the bulletin board shut down. At the
last moment, one technologically inclined commissioner, Steven
Wallman, intervened. Wallman saw the potential for digital technology
to make markets more effi cient and capital more accessible
to a wider range of companies, and he viewed Klein’s trading
system as an innovative experiment that should be allowed to proceed.
Spring Street was granted a waiver, called a No Action letter,
to operate the electronic exchange.
Klein sensed a bigger opportunity, however, to radically change
the way companies and investors interacted. So he launched his
second startup, Wit Capital, which would help other businesses
follow in his footsteps and use the Internet to directly reach investors
hungry for venture- stage investments—without expensive
investment bankers. Through its proprietary trading platform, Wit
would also let investors directly trade with one another, bypassing
fee- charging brokers. It was the age of “disintermediation.” The
Internet was tearing down barriers and leveling the playing fi eld
for the little guys, and Wit Capital would be their champion.
It was a remarkable moment, and one for which I had
a front- row seat after leaving my job as an editor at Business Week
magazine to join Wit Capital as senior vice president of content
in the fall of 1998. By then, the Internet was exploding and the
fi rst dot- coms were beginning to make their staggering debuts
on the public markets. TheGlobe.com, an early social networking
site, went public in November that year. Priced at $9 a share,