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That is possible, but in theory there has been due diligence to verify the company as an on-going concern. Normally the goal of going public is to let those who took the risk in the beginning to get a payout, given that they have had their funds locked up all this time. Those who choose to invest now are taking the risks for access to future returns.

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Normally the point of an IPO is to raise cash.

No, it used to be the point. Now a large portion of the point is to cash out existing investors. I do not claim it is the sole purpose, and this is largely true among unicorns, but it is certainly a shift. Look at Facebook: they kept raising huge series of private equity.

That is only true with a very small, very richly valued group of technology stocks. You're talking about a few dozen companies max per year. Using that small group to extrapolate a claim that therefore IPOs are now primarily used to exit shareholders, is clearly a dramatic overreach.

Pharma & biotech companies as one example (the market has seen far more IPOs in that sector over the last year than it has large tech companies using their IPO as an exit), are still very frequently doing IPOs so they can raise operational cash to burn and to use their public stock for funding and acquisitions later.

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