Um no. that is not how it works. When the listing is prepared, it is decided how many stocks there will be.

So let's say, for instance, that the company decides that there will be 10 million shares. The current owner is then given 40% or 50% of whatever percentage they decide on. The rest of the shares are then sold.

In other words, when the IPO takes off, the value of the 50% that the owner has doubles or tripples in value.

It's not true that early investors have to sell. If they are selling, it's because they know they are going to lose as soon as people come downt o earth.