Internet-based investment bankers provide companies with another sales channel for selling stock through initial public offerings (IPOs). The research issue that arises from this new process is to identify the differences between the traditional process and the new online process. Based on evidence from several investment banking firms that provide an electronic market for IPOs, we evaluate the new IPO sales process using transaction cost economics analysis. We find that the new online process typically results in benefits to the seller such as lower investment banker commissions and higher receipts from the sale, but also involves a higher level of risk when compared with the process that uses traditional investment bankers. Our overall conclusion is that the new process is a benefit to both IPO companies and investors because it provides an alternative online market that increases the level of competition for investment bankers and improves the overall efficiency of the market for IPOs.