The market for stock offerings by fledgling companies, which had appeared devastated by the stock market plunge two weeks ago, is beginning to show signs of life.

"I think everybody's heart skipped a beat on that Monday," said Charles Morris, president of Chesapeake Biological Labs Inc., an Annapolis biotechnology firm that found its plans to go public endangered by the stock market's dive. "But I also fundamentally believe that the event that occurred did not have a great deal to do with the long-term strength and viability of a lot of companies, including our own. The world has not come to an end."

Now that the market has rebounded somewhat, Chesapeake Labs expects to go ahead with its planned initial public offering, or IPO, in the middle of this month, Morris said. Interest in the company's stock remains steady, said the firm's investment banker, Walter Frey of Baltimore's Chapin Davis & Co.

Experts say that while many companies have had to cancel planned IPOs because of the market plunge, others are going ahead with their plans -- albeit with some adjustments.

"It's not impossible to go public in this climate," said Kirk Brown, the principal of the Arthur Young & Co. entrepreneurial services group in Reston. Brown's group is managing three IPOs of local firms, which he would not identify beyond saying that they were profitable firms in attractive high-technology industries.

"A good company, properly managed, can always go public," Brown said. "All this does is shake out some of the deals that shouldn't be out on the market anyway."

The stock plunge hurt IPOs by depressing prices in general and driving investors away from risky newer companies in favor of more stable blue-chip issues that were available at bargain prices.

"It's very hard to convince a buyer to look at a public offering when they can consider companies like Merck, IBM or Digital Equipment Corp.," said James Kleeblatt, senior vice president of Johnston, Lemon & Co., a Washington brokerage.

"It's obvious that anybody coming to market now will have to come at a considerably lower price than a month ago," said Gordon Macklin, chairman of Hambrecht & Quist, the San Francisco investment bank that handles a $700 million venture capital fund with significant interests in the Washington area.

Nevertheless, Macklin said, his firm is going ahead with its planned offerings. "You can subtract quite a bit from the values of a month ago and still produce a financing that is attractive for most companies," he said. "Many of the companies that we are dealing with are in an escalating growth phase and can use the money to move forward."

Companies that had been planning to go public but were scared off by the weak market are being forced to look elsewhere for funds. Local venture capital firms report being inundated with financing requests from companies that have decided to seek additional funds in the private capital markets rather than attempt to go public now.

"It's been phenomenal," said David Gladstone, president of Allied Capital Corp., one of the area's leading venture capital firms. "Our business is up 50 percent."

One local company looking at financing alternatives is Com-Site Enterprises Inc., a Beltsville computer facilities firm. It had filed plans for an IPO with the Securities and Exchange Commission at the beginning of last month, but now the plans are on hold, said Com-Site President John Rosato.

"What we feel at this point is that the brokers are so busy shoring up their losses that we wouldn't get the kind of interest during a road show to generate the proper price," Rosato said.

"We remain committed to the public possibility," he said -- but in the meantime, the company is looking seriously at private-financing alternatives. "We may go to a bank and borrow," Rosato said.

Alex. Brown & Sons Inc., a Baltimore brokerage and investment banker, had seven IPO deals registered with the SEC and another seven or eight ready to file when the market went into its nose dive. All have been shelved.

At Johnston, Lemon, Kleeblatt said his company was working on IPOs with three or four companies in the area. But now, he said, "we have advised them that this is not the environment to do a public offering."

Venture capital firms that had hoped to recoup their investments in private companies by taking them public now are being forced to make longer-term commitments. "Anybody who thought they could come in and invest in a company and then turn the deal over quickly is out of business," said John Sanders of Wachtel & Co., a Washington brokerage firm that specializes in raising money for entrepreneurs.

The options for the venture firms, Kleeblatt said, are either to "sit and wait for the market to improve" or to pump in more cash themselves by lining up private financing.

Still, experts say companies looking for private venture capital as a substitute for money raised through a public offering may be in for a shock.

With greater competition for their investment dollars, venture capitalists say they now can be more selective about the companies in which they invest and on what terms they invest.

"Before this, an entrepreneur might have to give away 20 percent of his company to a venture capitalist to get $2 million in cash," said Thomas Taylor, an analyst at Chesapeake Securities Research Corp. in Towson. "Now he probably has to give away 30 percent to get that much."

Local venture capitalists also say that entrepreneurs with high-risk investment opportunities that may have received money in the past will go begging now.

Mark Spikell, faculty adviser to George Mason University's Entrepreneurship Center, said that given the sudden increase in investment choices, "a lot of people in the professional venture capital community are going to go after later-stage deals that are less risky. There's going to be a little less money for companies in the early stages of development."

Arthur Marks, general partner in New Enterprise Associates, a Baltimore venture capital firm with a $400 million portfolio, agreed.

"We'll probably be more careful," he said. "Our investment rate is $60 million a year, and we'll probably slow that rate down. ... We're more careful on the market, the management and maybe {we'll wait to} see a company's product further along the line" before investing.

"We may do fewer deals," he said. "But we're still looking."