Bill Gurley, part of the Amazon IPO team, recalls Jeff Bezos being an anomaly. He insisted on a high price, caring more about long-term value than a celebratory first-day pop. Bezos was unconcerned that the stock might trade down initially, a mindset contrary to today's IPO norms.

When the IPO window opens, nearly every stakeholder—from bankers and lawyers to VCs and management—is financially motivated to go public. This collective "irrational exuberance" can lead to a rush of mixed-quality companies, perpetuating the industry's historical boom-bust IPO cycles.

For highly-capitalized companies like SpaceX and OpenAI, bankers are designing new IPO structures. Instead of standard 90-180 day lockup periods, they're planning staggered share releases over a longer timeframe to manage immense selling pressure from a large base of private shareholders and prevent post-IPO stock volatility.

While democratizing venture investing is a popular idea, Gurley warns that retail investors are ill-suited for the model where a majority of investments go bankrupt. This, combined with the lack of rigorous public audits in private companies, creates a dangerous environment for unsophisticated investors.

Venture capitalist Bruce Booth explains that bankers, lawyers, audit firms, and VCs all have strong financial incentives for a company to go public. This creates systemic pressure that may not align with the company's best long-term interests.

Contrary to the popular VC idea that IPO pops are 'free money' left on the table, they actually serve as a crucial risk premium for public market investors. Down-rounds like Navan's prove that buyers need the upside from successful IPOs to compensate for the very real risk of losing money on others.

Public market investors feel compelled to buy into major AI IPOs, even if they doubt a company's fundamentals. The strategy is driven by market dynamics: the expectation of a 'pop' from massive retail investor demand forces funds to participate to avoid underperforming their benchmarks.

Gurley argues that the rise of mega VC funds has fundamentally changed capital markets. These funds convince successful companies like Stripe to stay private longer, effectively 'hijacking' their hyper-growth years from the public markets. This prevents public investors from participating in wealth creation as they did with companies like Amazon.

To generate returns on a $10B acquisition, a PE firm needs a $25B exit, which often means an IPO. They must underwrite this IPO at a discount to public comps, despite having paid a 30% premium to acquire the company, creating a significant initial value gap to overcome from day one.