Michael L. Weinstein, a former legal counsel for the Reagan White House, helped defend Ross Perot in his spat with General Motors. Later he was on the "Oprah Winfrey Show" after he founded Find Dad Inc., a company with a toll-free number (800-PAY-MOMS) for tracking down deadbeat dads.
Jack Ben Ezra earned his nest egg as a corporate finance executive at Dean Witter and "retired" in his 30s to mow the lawn and play with his kids.
Together they founded Ben Ezra, Weinstein & Co., an Albuquerque, N.M.- based firm that has developed a do-it-yourself software kit for companies that want to make private placements or public stock offerings on the Internet.
The $1,200 tutorial software, Capscape, currently in limited use pending a full release next month, illustrates how to write a prospectus with all the required disclosures.
"Capscape writes the entire megillah," said Mr. Ben Ezra, 45, the chief executive officer. "It takes you through sentence by sentence, paragraph by paragraph."
On the CD-ROM, there are also 82 minutes of live-action video in which an ebullient, bearded, and bespectacled Mr. Ben Ezra defines corporate finance terms and explains, among other things, the difference between common and preferred stock (all with a picture of his family in the background).
Mr. Weinstein, 41, the chief operating officer, described his philosophy as -the belief that just about anybody can write a legal document and raise capital for a business.
Both partners view the Internet as a "democratizer" and say their product enables small companies secure funding with minimal professional help.
"Prior to this, if you wanted to have an official document drafted by a law firm it would cost $75,000 to $100,000 and take three to five weeks," Mr. Ben Ezra said.
"If you use Capscape it takes about two working days. Afterwards you take it to a lawyer and accountant, and it all can be done for under $20,000."
The companies that have worked with early versions of the program are Power Gardens of America, makers of indoor greenhouses; Elder Living Centers Inc., a proposed retirement-home chain; Enlightened Audio Design, a maker of high-end audio equipment; and Poof Products, manufacturers of soft toys like Tub Fun and Foam in Motion.
Poof Products' president, Ray Dallavecchia, said he has been using Capscape for a few months and plans an initial public offering in the second quarter.
"Capscape provides assistance in the preparation of the document, but there is still substantial obligation on the (issuing) company's part to put together ample information," said Mr. Dallavecchia, who is based in Plymouth, Mich., and distributes to chains like Wal-Mart and Target.
Mr. Dallavecchia said it has been time-consuming to assemble data about past performance and figure out what disclosures to make. But he hopes to raise $5 million through the Internet.
"We had spoken to some investment bankers," he said, "but most are not interested in that level of IPO."
Bud Reynolds, founder of Elder Living Centers in Albuquerque, has spent the last two months assembling information for his prospectus. He hopes to raise $7.5 million through an Internet IPO, with the proceeds for building assisted-living centers in small towns.
Mr. Reynolds said he chose Capscape over traditional financing because it "seemed like the cheapest way we could get up and running."
Mr. Weinstein and Mr. Ben Ezra say they were inspired by Spring Street Brewery, the New York-based purveyor of Wit Beer. Spring Street was the first company to make an Internet public offering.
The proposal sent the Securities and Exchange Commission into a frenzy.
Andrew Klein, president of Spring Street Brewery, mastermind of the Internet scheme, and role model for Mr. Ben Ezra and Mr. Weinstein, said he was "skeptical" of their company's software, though he had not seen it.
"In spirit, I certainly agree that it should not be as difficult as many lawyers would like their clients to believe to create an offering document," said Mr. Klein, a former securities lawyer.
"On the other hand, I'm not aware that somebody could automate that to the point where a computer could do it. I can guess that most people will only find the software as useful as a book on how to write a business plan."
Mr. Klein, who raised $1.6 million from 3,600 stockholders, said the financing process was far more difficult than writing the prospectus. He said finding investors became easier after a press release led to 2,000 news stories and a position on Netscape Navigator's coveted "What's cool?" list.
Other companies will find "it's going to be a lot harder than just taking a document and throwing it up on a Web site," said Mr. Klein, whose newest venture, Wit Capital, aims to underwrite small companies. "I don't think this product is going to put all the lawyers out of business."
Mr. Ben Ezra and Mr. Weinstein say they do not intend their software as a substitute for lawyers, just as a tool for reducing legal bills. They originally developed it with an eye toward their own IPO.
"We designed this software to help us," Mr. Ben Ezra said.
But the success of the Spring Street offering led the partners to reconsider their jobs as consultants and reinvent themselves as crusading software executives.
Their logo is a picture of a Wall Street street sign turned upside down; their toll-free number, which tweaks venture capitalists, is 888-VC- GOAWAY.
"It's the pump-your-own gas approach to financial life," Mr. Ben Ezra said. "There is a trend within American finance toward I-can-do-it-myself."
Trying to prove its own point, Ben Ezra, Weinstein and Co. made a $1 million offering over the Internet on Dec. 27. Given the issue price of 0.375 cent a share, one broker quipped that it would be generous to call it a penny stock. Last week it was around 3 cents.
Mr. Ben Ezra and Mr. Weinstein took their road show to Wall Street Jan. 8 and drew more than 100 financial professionals.
"I was quite impressed," said Sheldon Zerner, a financial adviser at Bishop Rosen and Co. "The concept is great and it really could be a sleeper. I'm sure throughout the world there are many thousands of companies that want to go public."
Gerald R. Rouse, a broker at M.S. Farrell and Co., called Capscape "very interesting and with some tremendous potential."
Mr. Ben Ezra said hundreds of orders have come in for Capscape. "People are calling us up with credit card numbers and expiration dates, saying, 'We don't care when it's ready, just send it to us.'"
Banks play a role in the company's master plan. Mr. Ben Ezra and Mr. Weinstein suggest they could purchase copies of Capscape and make them available to small-business customers.
"Assuming that Glass-Steagall falls, this will let every bank in the world assist clients in drafting financial documents," Mr. Ben Ezra said.