The IPO market for technology startups seems all but shut these days thanks to the recession and financial system meltdown.

The bar has been raised very high; much higher than most tech startups are confident they can reach.

Thanks to this, VCs in the United States are seeing some of the worst liquidity conditions in years.

But there is hope: Chinese online gaming company Changyou, a spin-off of Inc., proved that yesterday with a successful debut on the NASDAQ. Traded under ticker symbol CYOU, investors bid the new issue up 25%. At one point in the day, it was up 38%.

Obviously a one day gain of 25% doesn’t guarantee that Changyou will prove to be a good long-term investment but in today’s market, being able to go public and drum up enough interest to close well above your offering price is quite a feat.

So is this a glimmer of hope for other mature startups or an anomaly? Perhaps a bit of both. Changyou, which operates a popular online martial arts game called Tian Long Ba Bu, pulled in $202m in sales last year and reported net income of $108m. A lot of startups that might otherwise go public don’t exactly have those kinds of financials.

Another thing that helped Changyou’s debut: it was priced at an attractive multiple relative to its publicly-traded competitors and the number of shares offered was relatively small. Inc. still owns 70% of the company.

No matter how you slice it, Changyou demonstrates that if you have revenue, profit, a large market and a reasonable valuation, there’s still an opportunity to go public even in the worst of times. Perhaps startup investors just need to fund more Changyous.

Photo credit: bfishadow via Flickr.