The Nasdaq’s 68 percent surge since hitting its March low has lifted the spirits of investment bankers taking emerging-growth companies to Wall Street.

The latest sign of investors’ growing appetite for risk and the potential rewards of investing in newly public companies came with the September 24 debut of A123 Systems Inc., a VC-backed maker of batteries for electric cars that was founded in 2001 and has yet to turn a profit.

That didn’t stop investors from pushing the Watertown, Massachusetts, company’s shares to a first-day gain of 50 percent to close near $20, where they continue to trade. Demand was so great that underwriters boosted the number of shares offered by 50 percent and increased the IPO price to $13.50 a share from the original pricing target of $8 to $9.50.

Bankers also point to successful initial public offerings of San Francisco-based OpenTable, Inc. and SolarWinds, Inc. in Austin, Texas, earlier this year as more evidence of brighter days for companies hoping to go public. OpenTable was offered in May at $20 per share, up from an original pricing range of $12 to $14. The shares recently changed hands at $27.

“The IPO market is back and looks to be quite strong,” said Benjamin Howe, CEO of America’s Growth Capital. About a third of this year’s 32 IPOs were from the tech sector. There was a dearth of IPOs for venture-backed companies in recent years. Howe anticipates that this year’s 11 tech IPOs will rise to 15 to 20 by year-end and that next year at least 40 tech companies will make their public debut.

“We might be getting a little piggy on the pricing side,” he said, noting that the first five deals this year have jumped an average of 37 percent while the last six deals are up only 9 percent.

A more receptive audience for IPOs means more than just big paydays for entrepreneurs and their investors, given the broader impact these companies have in the San Francisco Bay Area, where a third of venture capital is typically invested.

“People grossly underestimate the importance of the IPO market in the tech ecosystem,” said Peter Falvey, co-founder and a managing director at Revolution Partners.

Jon Merriman, CEO of San Francisco investment bank Merriman Curhan Ford, said the stage is set for a string of IPOs from venture-backed middle-market companies to go public over the next year or two. He points to companies with annual revenue of up to $100 million as potential candidates for the public market.

“We’re heading into the next cycle,” said an optimistic Merriman, who hasn’t been shy in describing the sorry state of the financial markets over the last couple years. He now sees investors sitting on cash who will be looking to put some of their money to work.

Major university endowments—burned last year on some of their illiquid, alternative investments in private equity and hedge funds—are taking a second look at investing more money into more liquid stocks and bonds, which could give the IPO market additional firepower.

Also, a healthier IPO market could come full circle, giving some of those same institutional investors greater liquidity and bigger paydays on their venture investments.

While that virtuous circle has yet to be realized, Merriman said, “Investors are sitting on a wall of cash.”