Venture capitalists are getting a bailout. But this one isn't government-funded -- heck, it isn't even technically a bailout. It just looks, feels, and smells like one.

I'm referring to a Hybrid Private Public Offering of stock, or HPPO, which creator InsideVenture describes in a press release as "an alternative IPO placement." HPPOs -- pronounced "hippos" -- connect promising start-ups with buy-to-hold institutional buyers at firms such as T. Rowe Price (NASDAQ:TROW), at a much earlier point in the process than traditional IPOs do.

HPPOs help start-ups circumvent big gatekeepers such as Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS) in their quest for equity capital. Meanwhile, VCs get improved liquidity, which should create more opportunities to realize returns.

There have been precious few HPPOs (pronounced "hippos") thus far. Rosetta Stone (NYSE:RST) leads a short list of recent IPO rebels that also includes Mead Johnson (NYSE:MJN) and (NASDAQ:CYOU). If more companies pursue HPPOs, the greater liquidity they offer could help unfreeze an IPO market in urgent need of thawing.

Is the rise of the HPPO as good as it sounds? In one sense, sure. Innovators need capital, and the IPO process is their lifeline. But in another sense, we've already corrected the IPO process, making it a better vetting vehicle than it was in the '90s. I'm not sure it's a good idea to turn the capital spigot on full blast again.

When capital flows too freely, even the terminally dumb get their turn at the trough. Color me jaded, but I'd rather constrict money flow than permit the rise of the next EMeringue.

Maybe I'm overstating the risk. Maybe we need more firms to file with the SEC earlier in their lives. Nevertheless, the Fool in me celebrates that both Twitter and Facebook are taking their time coming public. They'll age like fine wine. And when they're finally ready for their IPO close-up, we Fools will be here to drink in the returns.

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Fool contributor Tim Beyers didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. The Fool's disclosure policy says ... Only you can prevent poor disclosure.