Executives hope busy IPO week is precursor to rebound

Massachusetts companies such as BG Medicine Inc., Archemix Corp., GlassHouse Technologies Inc., and NameMedia Inc. prepared to go public in the past two years, but withdrew their IPO registrations, citing unfavorable market conditions. The increase in companies again announcing plans to go public is significant because IPOs, in which companies offer stock to the public for the first time, allow venture capital firms that invest in young companies to make profits on those investments. That money is often plowed back into more early-stage investments in start-ups, boosting the economy.

This week, five venture-backed companies are scheduled to go public, including one based in Massachusetts: high-tech battery maker A123 Systems Inc. in Watertown. Across the country, only six venture-backed firms went public in all of 2008, and there have been seven venture-backed IPOs so far this year.

Scott Griffith, the chief executive of the car-sharing service Zipcar, which is based in Cambridge, said yesterday his company’s plans to go public in 2010 are back on track after last year’s economic crisis caused him to reassess those plans.

“Once we saw the beginnings of the downturn, last year, I took all the pretty investment books and threw them in the trash,’’ he said. But after focusing on building the company in the last 12 months, Griffith said, Zipcar is back preparing for “a marquee IPO.’’ He said he is encouraged by the start of a revival in IPOs and the uptick in the stock market.

Fifteen firms are currently registered as planning to hold IPOs soon, according to the National Venture Capital Association in Arlington, Va. That includes three from Massachusetts: A123 Systems, Internet performance firm Gomez Inc. of Lexington, and alternative energy company First Wind of Newton.

So will IPOs from A123 and other companies inspire more entrepreneurs to go public?

“The answer is: Hell, yes!’’ said Paul F. Deninger, vice chairman of the global securities and investment banking group Jefferies & Co. “We are very actively talking to a bunch of companies on both coasts about the IPO market.’’

Deninger said that a year after the economic shocks of the credit crisis, “institutional investors are crawling out of their cave, looking for profitable companies that have strong growth. . . . The IPO market is one place where you find young companies that are growing fast.’’

Speaking yesterday before the Boston College Chief Executives’ Club at the Boston Harbor Hotel, Robert Greifeld, chief executive of the stock exchange company Nasdaq OMX Group, cited “a recent surge in IPO applications,’’ calling that a “positive for our economy - these are the companies that are truly innovating, changing lives, and generating jobs.’’

If this week delivers a turnaround in the IPO market, it will be after a long drought. LogMeIn Inc., a Woburn software maker that went public in July, was the last Massachusetts venture-backed company to go public, according to Emily Mendell, vice president of strategic affairs for the National Venture Capital Association.

Over the last two years, several Massachusetts companies started down the road to an IPO but withdrew registrations because of the harsh economic climate. NameMedia, GlassHouse Technologies, Archemix, and BG Medicine did not respond when asked whether they were planning to re-register for an IPO.

Mark G. Heesen, president of the National Venture Capital Association, said that if this week’s crop of IPOs is received well, he expects the pace to pick up early next year.

“To be honest, I’m hearing a lot of talk, but I haven’t seen the registrations yet,’’ he said. “If these five IPOs do well, that will push some of these companies to actually gather up their papers and register.’’

The companies that do test the public markets might find that investors are receptive, said Ben Howe, chief executive of America’s Growth Capital, a boutique investment bank in Menlo Park, Calif.

“Remember that there are hundreds of billions of capital invested in companies that would have normally gone public if the economic conditions had been better,’’ he said. “There’s also an enormous amount of investment money on the sidelines.’’

According to Heesen, there may not be a significant increase in IPO activity until next year, as it often takes months for companies to prepare for a filing.

If there is a new crop, it may include Zipcar. “The IPO process is a huge drain on executive resources, so we’re being cautious about it,’’ Zipcar chief executive Griffith said. “And a year ago, I didn’t think we’d be in this position. In fact, I would have bet against it.’’

But now he is preparing for the time-consuming IPO process.

“It’s looking better than we thought,’’ he said.

D.C. Denison can be reached at denison@globe.com.