Well, the reason that wouldn't work is because the primary objective of the IPO is to raise $$$ for The Corporation and not the "existing shareholders". The "I" in IPO is the critical part of the equation here since it is this initial exclusivity that lures large institutional investors from wanting to get in before suckers like you and I do. In turn, they swallow up very large amounts of shares guaranteeing the issuing company a large amount of money on the day of their IPO.
Furthermore, the Founders/VCs/Employees just don't have the reach or the technical know-how to appropriately price the stock to maximize their potential gains - the investment banks have both but, as you read in this article, they often use their expertise to their own advantage.
Lastly, the Founders/VCs are in fact able to sell off their shares during the IPO for their own personal benefit so long as there is no clause in their IPO terms stating that they cannot. This will enrich them personally BUT it is highly advised that they don't because the signal they're sending to the market is "cash out early!"
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Well, the reason that wouldn't work is because the primary objective of the IPO is to raise $$$ for The Corporation and not the "existing shareholders". The "I" in IPO is the critical part of the equation here since it is this initial exclusivity that lures large institutional investors from wanting to get in before suckers like you and I do. In turn, they swallow up very large amounts of shares guaranteeing the issuing company a large amount of money on the day of their IPO.
Furthermore, the Founders/VCs/Employees just don't have the reach or the technical know-how to appropriately price the stock to maximize their potential gains - the investment banks have both but, as you read in this article, they often use their expertise to their own advantage.
Lastly, the Founders/VCs are in fact able to sell off their shares during the IPO for their own personal benefit so long as there is no clause in their IPO terms stating that they cannot. This will enrich them personally BUT it is highly advised that they don't because the signal they're sending to the market is "cash out early!"