Timothy M. McGinn, chief executive of Integrated Alarm Services Group Inc., is taking his company public as soon as the Securities and Exchange Commission says he can. That makes him an exception. The number of companies going public hit a 28-year low last quarter.

McGinn said he's going now because he has no assurance economy will be better later this year. "We're not willing to sit around for six months and hope that the markets get better," he said. "I don't think the world stops spinning because of any war."

There hasn't been a new issue in four weeks. The dollar value of new issues hasn't slumped this much since the fourth quarter of 1990 -- right before the last Iraq war. No new issues are scheduled for the next few weeks, meaning a key source of funds for start-up companies has dried up.

Fledgling companies flocked to the equity markets during the stock market boom. As the market was frothing to a crest in 2000, no fewer than 443 companies went public, according to Dealogic LLC, a corporate finance data firm. When firms go public, they receive money in exchange for selling ownership stakes. Unlike debt, equities do not bind companies to a schedule of regular interest payments.

But as the stock market bubble burst, the number of IPOs plummeted, dropping to 97 in 2001 and then to 86 last year. So far this year, with the economy sputtering, only five companies have made the transition from private to public, according to Dealogic.

The war in Iraq is only exacerbating conditions, executives and IPO experts said. The markets now absorb developments in Iraq minute-by-minute and have become prone to violent and unpredictable swings, making investors wary of both established stocks and new issues."Traditionally, fluctuations in the market make it very difficult for IPOs to happen," said David A. Steinberg, chief executive of InPhonic Inc., a D.C.-based wireless services firm that is in the process of gaining permission from the SEC to go public. "People want to do IPOs in markets that are stable."

A thin or erratic trading environment increases the risk that a company will be unable to complete the offering, or will be forced to cut the price of the stock, said J. Rock Tonkel, head of investment banking at Friedman, Billings, Ramsey & Co. "Several of the IPOs that have been done thus far this year have been revised downward from their initial pricing ranges."

Last summer, with stock indexes tumbling, few companies went public. In October, as the markets mounted a strong rally, IPOs appeared to be making a modest comeback, with 11 companies going public. But by January, stocks had given back their gains. No companies went forward that month. Just four went public in February, and one in early March.

"There is just no demand whatsoever for new issues," said David Menlow, president of IPOfinancial.com. "What is difficult to reconcile is that the financial markets don't just eliminate their need for funds."

The debt market has picked up some of the slack, but for some firms it simply isn't an option, analysts said. Biotech companies, for example, can burn millions of dollars a month while developing new drugs or medical technologies. Taking on significantly more debt might threaten their existence. So some have turned to the private equity market.

As a group, the companies that have gone public in the past six months have produced respectable returns, although nowhere near the huge first-day pops that were typical of new issues three years ago. IPOs debuting from October to March have posted an average 3.7 percent first-day gain. Collectively, they were up about 8.5 percent as of Monday, according to Dealogic.

Many of those were reinsurance companies that specialize in assessing terrorism, aviation and professional liability risk. Endurance Specialty Holdings Ltd., a commercial insurance company that offers catastrophe policies, went public Feb. 28 at $23 per shares. Yesterday, its shares closed at $24.

Chicago Mercantile Exchange Holdings Inc. went public Dec. 6 on the New York Stock Exchange and has gained 37.1 percent from its initial share price of $35, because the options traded there gain value as markets become more volatile. It closed yesterday at $47.97.

Portfolio Recovery Associates Inc., a consumer debt collector that can take advantage of record household and credit card debt rates, went public in November for $13 a share. Its stock has risen 76.9 percent, closing yesterday at $23.

"The market adapts. It finds opportunity," said Ben Holmes, president of Morningnotes.com, an investment advisory firm.

Tonkel said Friedman, Billings, Ramsey has a backlog of several IPOs, each worth at least $250 million, that the firm expects to take to market in the next few months. "Our pipeline would suggest that there is a pent-up demand for capital and issuers are awaiting a period of stability in the market," he said.

But Richard J. Peterson, chief market strategist for research and data firm Thomson Financial, said he doesn't see a huge backlog forming. At most, there are 35 to 40 new stock offerings in the works, he said. In addition to the weak stock market, those issuing IPOs have to deal with regulatory concerns about the unfair distribution of IPO shares in the past and mutual funds' smaller cash holdings, Peterson said.

"My guess is it's going to be another down year," he said.