Not quite, everyone dumps on you and your mom’s 401k when the company goes public, and you’re legally shut out from investing in the private rounds in a perpetual caste system that people barely know exists, by design.
Its a pretty awesome deal, when you can do it fast enough, or often enough.
I would say what the investors do is more Ponzi like than what they do with the shares.
Some investors, the VCs, pretty much guarantee the portfolio company some business by making their other portfolio companies the customers, which gooses the revenues of the primary company and then they make up the revenue multiple to convince others to buy some more shares at a 12x higher valuation (which means its the same money going around in a circle, VC money invested in one company and that company becomes a customer buying the widgets using the of the next company the same VC invested additional money into, but the widgets were also bought with the VC money invested into the first company). Until going public and dumping yet again in the public market. Rinse, repeat.
All this time the VCs are often raising additional funds and going into the the same company’s rounds. So the VCs are more ponzi like than any individual company, but the company does also overlap with some aspects of a ponzi.
(I dont have an issue with any of this except for the aforementioned caste system, let the people invest and fight for deal flow)