Hambrecht's auction expertise, along with his bottomless Rolodex, got him into the Google IPO. But unlike previous auctions that Hambrecht led, Google brought him in as a co-manager, behind the Wall Street powerhouses Morgan Stanley and Credit Suisse. As much as Hambrecht views an auction as a way to find a more honest IPO price, and as much as wanted to help Google in its pursuits, he found himself battling with the big banks, which wanted to ensure that their clients made money. After having similar experiences on a smaller scale with NetSuite in 2007 and Rackspace a year later, Hambrecht says his firm stopped trying to compete for business against the so-called bulge bracket firms—Morgan Stanley, Goldman Sachs, etc.
"It's a constant wrestling match for them to drag the auction back to their system," Hambrecht said in an interview at his San Francisco office. "The relationship we had with the bookrunners was so adversarial; I said `Hell, I just don't want to do this again.'"
Ann Sherman, an associate professor of finance at DePaul University in Chicago, has spent much of her career studying IPOs, and that's left her a skeptic about auctions. In an underwriter-led IPO, bankers spend hours and hours gathering information that helps guide an offering, from data on comparable companies and investor appetite to market conditions. All of that feeds into the price discovery process. There's a similar reason that homeowners pay hefty fees for real estate agents rather than trying to sell a house themselves—it's too important an event to leave to chance.
According to Sherman, auctions can work for things like pricey paintings and Beanie Babies on eBay, because in those cases, people are buying something they want, either as a toy or to hang on their wall and admire. Stocks don't work that way.
"People aren't buying Google stock to take it home and hug it and be happy," said Sherman, who advised Google in its IPO.
Buyer, who has been helping companies in the IPO process for seven years at Class V Group, said the topic of an auction almost never comes up. For the few executives who have discussed it, the idea has been dismissed pretty quickly by board members and advisers, she said. At Google, she was working with a team that openly shunned Wall Street and had the brand recognition and consumer appeal to go against convention. Even then, it wasn't a pure auction.
"I would encourage the widely known, rapidly growing, strong business model, consumer-oriented businesses to consider it," she said. "For 99 percent of companies, the traditional approach is the right answer."
But there may soon be auction opportunities for the less well-known brands. In recent years, the IPO market has all but disappeared for tech companies that can't raise at least $100 million and achieve a public market valuation in the $1 billion neighborhood. Scores of venture-backed companies are smaller than that, and have investors who would love to sell at least part of their stake.
Hambrecht said he is in the process of working with a few companies on auction-based offerings in the $30 million to $50 million range that should result in market valuations of $100 million to $200 million. While he can't name them, he said some are on file confidentially under the 2012 Jumpstart Our Business Startups (JOBS) Act, which lets companies with less than $1 billion in annual revenue keep their finances under wraps until shortly before the roadshow to market the deal.
Read MoreWhat does the JOBS Act do?
They're intrigued by an auction, because it reduces their fees to bankers and lawyers and leaves less cash on the table to be gobbled up by money managers, Hambrecht said. He's targeting investors who have typically not had access to IPOs, can put fewer dollars to work and don't expect to get a big pop in the stock right away.
"There are a whole lot of companies that have come through both bubbles, really good companies that have been in VC portfolios for 10 to 15 years," Hambrecht said. "They don't need much money; they need liquidity for investors. We're out there saying we're trying to work out a process to allow you to get public in an efficient and cost-effective way."
That's very different than the Google story.
—By CNBC's Ari Levy.