Mark:
But it isn't - it's the VCs selling, the round B, C, D, E, etc investors selling, it's employees selling, and it's management also selling. Nearly everyone is selling some at the IPO, and only public shareholders (individually and via myriad funds) who are buying. All those other investors are EXITING, or at least partially exiting, at the IPO. It wasn't always like that.

And it also didn't used to be that the connecting rods were made in one factory, the fuel-injectors in another, and the chips that controlled it all were made in yet another factory. But the "excelsior," the "onward and upward" of our technical economy are a story of unrelenting specialization, standardization, and mass-production until the most exquisite expression of technology is no longer a graphite pencil.

Without the exit of going public there would be, essentially, no venture capitalists, no firms that specialized in just how you got companies from a market cap of $10,000 up into the millions. If every time you had someone who figured out how to do this, they had to, for obscure moral or aesthetic reasons that are hard to justify with math or physics, hold that investment for the next 20 years to prove their moral worth and depth of character, we would have no steady stream of new start-ups.

Y-combinator isn't a bug, it is a feature.

R: