FACEBOOK’S IPO flop had an immediate chilling impact on the initial public offering market in the US. Three companies quickly halted their planned IPO on the back of Facebook shares diving below offering price, and stubbornly remaining there two weeks later.

Are companies likely to remain too skittish now to commit to an IPO? In the short-term almost certainly yes.

Even if other global economic worries were not in the background, Facebook’s poor showing after so much anticipation has thoroughly dashed expectations that its market debut would light a fire under a moribund IPO scene.

On the other hand, many commentators feel the dismal aftermath, already full of clamouring lawyers and threatened lawsuits, may force a regulatory overhaul. Many feel this is needed if IPOs are to avoid becoming little more than cash-in-quick days for already wealthy insiders.

Because even though last-in investors were stung by the fast slump in Facebook shares, the IPO made lots and lots of money for well-heeled early investors on the grey market, many of whom cashed in on the first day of trade.

Financial writer John Cassidy summed up why this is a serious concern for the technology industry in a blog post for the New Yorker’s website. “The IPO system only works if it preserves a balance between public and private investors. If this balance is upended, and virtually all of the rewards are reserved for insiders, ordinary investors will refuse to play the game. A dearth of IPOs would hurt insiders along with everybody else. More important, a time-tested system of financing companies, which rewards innovation and makes Silicon Valley the envy of the world, would be destroyed.”

However, deciding on whether the whole system needs fixing is definitely a longer-term issue.

President Obama’s JOBS (Jumpstart Our Business Startups) Act may do more short-term to encourage new IPOs as it eases some regulations and makes it less onerous for companies, especially smaller firms that might not before have considered an IPO, to go public.

Some companies are lining up to IPO under the Act’s terms, and one already has – Seattle-based ClearSign Combustion, a green technology company that raised $12 million at the end of last month.

That was pre-Facebook, yes, but then again it also was before the supposed boost that Facebook was to provide the IPO market.

But medium and long-term, I don’t think Facebook’s IPO is going to seriously shake the market.

That’s because there’s really no sign that it has had much, if any, impact on the venture world and if the VCs – who are betting on IPOs from some of their investment portfolio – are still putting money into companies they clearly feel the IPO world has not imploded.

That’s true over here too. Irish VCs say there’s quite a lot of activity at the moment. And in addition to the domestic VC scene, many international VC firms have been sniffing about in Ireland in the past couple of months, deciding whether to set up a base in Ireland to avail of government co-investment funds offered through Innovation Fund Ireland.

This fund, established under the last government, has a pool of up to $250 million for international VC firms that are willing to make a significant number of investments into early-stage, high-growth Irish or Irish-based companies. Some international VCs, such as Silicon Valley’s Draper Fisher Jurvetson, are already here following the initial call back in 2010.

A second call for expressions of interest opened last March, and the deadline for applications is June 14th. Hence, many international funds have had representatives checking out the Irish market as they decide whether to set up here. The promise and the subsequent fizzle of Facebook’s IPO is unlikely to feature as a point of consideration.

However, Facebook’s knock-on effects may well influence for the type of technology company trying to go public or receiving venture funding.

Social media companies have been attention and investment-grabbers of late, but they are likely to come under much greater scrutiny.

If Facebook couldn’t maintain its launch price investors will want to make sure future social media companies launch at a viable price.

Investor interest is likely to shift at least for now towards technology companies with proven intellectual property, a clear business proposition and an income stream with some obvious routes to further growth.

To be sure, social media is extremely powerful and its promise is alluring.

But a business plan that exists right now, in the real world, is a lot more enticing.