August was a hot month for IPOs in Silicon Valley.

Filings last week by two Bay Area companies brought to seven the number that announced plans during the month to go public. And observers expect more to follow suit thanks to eager Wall Street investors, strong returns and new federal rules that have smoothed the path to an initial public stock offering.

"There's more of an appetite for IPOs than there's been in some time," said Thomas Kellerman, an attorney with Morgan Lewis in Palo Alto who co-chairs the firm's tech practice.

Indeed, research firm Renaissance Capital reports there have been 153 new IPO filings nationwide in 2013, a 56 percent uptick over the same time last year.

Dan Rosensweig, president and CEO of Chegg, a company that rents textbooks. (Chegg photo)
Dan Rosensweig, president and CEO of Chegg, a company that rents textbooks. (Chegg photo)

Tech IPOs virtually screeched to a halt for several months after the May 2012 pratfall by Facebook. Given the wealth effect that successful IPOs have on the valley economy, even nontechies have reason to hope this year will be different.

"IPOs create a lot of wealthy people. Wealthy people start spending a lot of money," said Russ Hancock, CEO of Joint Venture Silicon Valley, which studies the valley's economy.

He and others note that newly minted millionaires dine at expensive local restaurants, buy luxury cars from local dealerships and hire people for jobs like landscaping and remodeling.

"The IPO market feeds the service side of our economy," Hancock said. "And it's going to continue driving housing prices."

Local governments, which rely on sales taxes and state income taxes, also care keenly about IPO performance, especially in these lean times. So do nonprofits: Tech entrepreneurs who've struck it rich via IPOs and gone on to establish foundations include the founders of Hewlett-Packard (HPQ), Intel (INTC), eBay (EBAY), Google (GOOG) and, yes, Facebook.

Take heart, therefore: Renaissance Capital analyst Greg Leffert said investors are emboldened by the strong performance so far of 2013's tech IPOs, which have notched a 35 percent average return.

Enterprise software companies have been especially hot, with four -- including Redwood Shores-based Marketo -- doubling from their initial offering prices.

"Money has come out of bonds, and people are trying to put it into the stock market," said Marketo CEO Phil Fernandez, whose company sells marketing automation software over the cloud. Fernandez said institutional investors were "chomping at the bit" when his company held its pre-IPO roadshow. Marketo finished its first day of trading in May up 77 percent over its $13 IPO price; Friday's close was just over $35.

The latest entrants to the party -- RingCentral of San Mateo and Mountain View's Violin Memory -- likewise play in the enterprise software market. So does Milpitas-based FireEye, which filed its IPO plans Aug. 2 and is led by former McAfee CEO Dave DeWalt.

But the trend is showing signs of broadening. Others that filed in August focus on biotechnology, which has generally been well-received by IPO investors of late, and cleantech, which has not. There's also a consumer-focused startup -- textbook-rental site Chegg -- taking the plunge.

With Twitter looking increasingly likely to go public in the next year, some investors expect the door to open more widely to consumer technology.

David Golden, a longtime valley investment banker who's now a partner at AOL founder Steve Case's Revolution Ventures, said Facebook's recently having climbed above its IPO price has helped goose investor confidence in consumer startups.

He's also among those who note the impact on the IPO market of new federal rules that let companies file early plans with the Securities and Exchange Commission in private.

"These companies can have discussions with potential investors, refine their story, await next quarter results -- all without having to do so under public scrutiny, which can provide pressure to get the deal done," Golden said.

While some 250 companies have filed IPO plans under the confidentiality provisions, he predicted many will end up not going public because the SEC or prospective investors will deem them not worthy. That, Golden and attorney Kellerman both say, should help keep unqualified companies from launching dud IPOs that could shut the window for others.

"All that said," Golden cautioned, if the stock markets sag in the next few weeks, "it will take a lot of the wind out of the IPO sails."

Contact Peter Delevett at 408-271-3638. Follow him at Twitter.com/mercwiretap.

HEADED TO THE BIG DANCE

Seven Bay Area companies have filed to go public since Aug. 1.
Chegg (Santa Clara) -- Textbook rentals
FireEye (Milpitas) -- Cybersecurity
Pattern Energy (San Francisco) -- Wind farms
RingCentral (San Mateo) -- Cloud-based telecommunications management
RocketFuel (Redwood Shores) -- Digital advertising technology based on artificial intelligence
Ruthigen (Santa Rosa) -- Biotech
Violin Memory (Mountain View) -- Enterprise data storage

Source: IPO Monitor; Mercury News research