Just as one high-tech breakthrough often paves the way for the next big thing, technology IPOs move in virtuous cycles, too.
Twitter's scintillating stock market debut punctuated a procession of highly anticipated coming-out parties over the past two-and-half years, providing a springboard for a new generation of rapidly growing startups to make the leap to Wall Street.
The next wave of potentially hot IPOs includes trendy services such as AirBnB, Square, Spotify, Dropbox, Uber, Snapchat, Pinterest, Box, Scribd, Flipboard and King.com. Most of their services are tailor made for smartphones and tablets, a crucial characteristic that helped feed the rabid demand for Twitter's stock in its initial public offering last week.
Despite the short-messaging service's unprofitable history, Twitter is now worth about $29 billion - a valuation that has enriched its founders, employees and early investors.
"Twitter just made it clear that the IPO window is open and a lot of success can be had," says Ira Rosner, an attorney and shareholder for Greenberg Traurig, a law firm that helps prepare companies for IPOs.
Other startups -and the venture capitalists who provide them with rounds of funding- will be angling for similar windfalls by filing their own plans to go public over the next two years, Rosner believes.
"There is no question that a successful offering encourages other offerings," he says. "It gets people excited and it creates buzz."
Even before Twitter's IPO, good vibes were rippling through the stock market as the Dow Jones industrial average and Standard & Poor's 500 indexes repeatedly set new highs. The fertile conditions have produced 199 IPOs in the U.S. this year, according to the research firm Renaissance Capital. At the current pace, 2013 is on track to be the biggest year for IPOs in a decade.
Sentiment among venture capitalists is also strong - the highest since 2007 according to a survey by Mark Cannice, a University of San Francisco professor of entrepreneurship who polls Silicon Valley financiers every three months.
The companies generating the most interest from venture capitalists include Uber, the provider of on-demand car services that received $258 million so far this year and Pinterest, which nabbed $425 million. Pinterest's latest round of financing, for $225 million, valued the popular online pinboard service at nearly $4 billion. The San Francisco company just recently began trying to generate revenue, which means it could be several years before it becomes profitable. Snapchat, meanwhile, recently turned down a $3 billion buyout