Investment banks are the underwriters. They do in fact buy the IPO shares from the company and re-sell them, but the mark-up for that resale is on a commission

Investment banks are the underwriters. They do in fact buy the IPO shares from the company and re-sell them, but the mark-up for that resale is on a commission basis, customarily 6%. It’s not like they are buying the shares at price x and then trying to sell them at price y. The round is priced jointly between the underwriter and the IPO’ing company based on orders obtained during the road show.