IPO Market Not All Bad…Especially If LinkedIn Files

The IPO market for technology companies has been lousy lately. But it’s not all doom and gloom, if venture capitalists, such as Bill Gurley, are to be believed.

“The buyside is hungry for growth stories,” says Gurley (pictured), a general partner at Benchmark Capital. Gurley spoke on stage this morning at the TechCrunch Disrupt conference in San Francisco with Morgan Stanley investment banker Michael Grimes.

The two said the IPO market was not all bad, especially since so many high-profile tech companies, such as Facebook and LinkedIn, are expected to go public in the next few years.

There are rumors LinkedIn is talking with bankers, Gurley said. Clearly investors will hunger for this social networking site.

Grimes pointed our that 30 tech IPOs have launched so far this year, well above the 12 that debuted last year. (Through the first two quarters of 2010, 26 of the IPOs were venture-backed, according to the National Venture Capital Association and Thomson Reuters. Q3 numbers are due out on Oct. 1).

“There is a belief the IPO market is closed,” he said. “It is not.”

But it is discriminating. There are 65 prospective IPOs that have been filed and withdrawn or which sit waiting, he added.

So why the discrepancy? A company doesn’t need profit or $100 million in annual revenue, but it needs to convince investors it is on the path to profits, Gurley says. Growth seems to be key.