Jun. 4--A new financial creature spelled HPPO and pronounced "hippo" has been conjured in a Sand Hill Road startup and put on display on Wall Street.

The question now: Will HPPO fly? Will it carry small and mid-cap growth startups to the promised lands of Nasdaq or the New York Stock Exchange? Will it rescue the venture capital industry and perhaps help your 401(k) in the process?

"Well, saving the economy is a big job, but we think we've figured it out," quipped InsideVenture CEO Mona DeFrawi, who unveiled HPPO in a bell-ringing ceremony this week at the NYSE, a supporter of the concept.

She was only half joking. HPPO stands for hybrid private-public offering -- InsideVenture's untested alternative to the conventional IPO, or initial public stock offering. A robust IPO market is considered essential to the health of venture capital and the innovation it finances. But even with the recent splashy debuts of OpenTable and Rosetta Stone, the IPO market hasn't been healthy since 2007.

Look at it this way: Your retirement fund may have been weighted down by General Motors. Some new startups hitting Wall Street could help.

Venture industry leaders warned of a systemic failure in the IPO market months before the collapse of Lehman Brothers and the global financial crisis. The reasons are complex, ranging from post-Enron laws to the disappearance of boutique banks.

Into this disarray came InsideVenture, billing itself as "a

next-generation financial services platform." DeFrawi, a 20-year veteran of the private equity and venture capital industry, secured support from such venture firms as NEA, Venrock and DCM, as well as financial institutions such as T. Rowe Price, Wasatch Advisors and Silicon Valley Bank.

InsideVenture says it aims to match "best of class" private companies with late-stage investors through its members-only conferences and "transaction-centric online platform" -- effectively replacing some of the services once provided by boutique banks. More than 200 investment firms have now joined InsideVenture, as have 70 private companies. Several, DeFrawi said, "are in due diligence to close deals."

The HPPO, DeFrawi said, is a response to the way the IPO had evolved to favor the short-term interests of hedge fund investors and render long-term mutual fund investors "second-class citizens." In its presentation, InsideVenture employs a yin-and-yang diagram to illustrate the goal of restoring a proper balance. The HPPO would provide more stock for long-term private investors and release less into the retail market.