The group is offering 65 cents a share. That represents a 91 percent premium to Thursday's closing price of 34 cents but a price that is dramatically below Netpliance's 52-week high of $26.12.
The investor group includes chief executive John McHale as well as shareholders who hold a combined 52 percent of Netpliance's stock. Netpliance said it also expects other shareholders may join the buyout group.
However, the deal is subject to approval of a special committee of Netpliance's independent directors. Following the bid, Netpliance shares rose 64 percent, closing at 56 cents.
A representative of the Austin, Texas-based company was not immediately available for comment.
Netpliance is best known for pioneering the I-opener, a desktop Web-surfing appliance. However, the company said last month that it would get out of the business of selling the I-opener itself, instead focusing on helping other Internet service providers sell and manage I-openers and other Internet devices.
The I-opener was praised for helping to create the Internet appliance category, a segment that now includes Microsoft's MSN Web Companions, 3Com's Audrey and the Gateway-America Online Touch Pad.
Netpliance ran into trouble, however, as investors soured on its business model, which focused on selling the I-opener well below cost and making its profits from monthly Internet service fees as well as sales of accessories and a share of e-commerce revenue generated by Netpliance owners.
Netpliance has shifted its pricing scheme several times, charging anywhere from $99 to $399 for the unit. Netpliance also came under pressure when hackers found a way to turn the unit into a Linux-based computer, bypassing Netpliance's Internet service.