WR Hambrecht & Co, the firm set up by veteran investment banker Bill Hambrecht to take companies public through an online auction system, announced Wednesday that it has received an investment from Novell Inc. The investment gives Novell a minority interest in the growth-stage investment bank, although a Hambrecht spokesperson said both companies have agreed not to specify the size of either the investment or the stake.
The deal was made through the software company’s Novell Ventures unit, formerly known as the Internet Equity Fund, a $50m fund that typically makes investments in development-stage software companies in their first or second rounds of financing.
While the move may be seen as a bit of a departure from Novell Venture’s usual investments, the company said the new relationship will provide it with a valuable vantage point from which to view developments at the intersection of technology and capital markets, according to Novell chief executive Eric Schmidt.
In addition, the arrangement would presumably provide Novell with a valuable research base from which to make other investments. The bank, for its part, said the deal will give it greater access to the world of technology and looks forward to working with Schmidt and his team. In announcing the investment Bill Hambrecht himself said, There is no smarter CEO in Silicon Valley than Novell’s Eric Schmidt.
Hambrecht & Co is still looking for strategic capital to fund its ongoing business objectives and said that the Novell investment should help it pursue a wide variety of growth and new business opportunities. In February, the bank launched its OpenIPO system, an auction-based method of taking companies public on the internet (CI No 3,608). It completed its first IPO, for a California winery, earlier this month.