One good reason is because it's illegal. You can't just go around selling shares in your company to anyone. There is a reason why an IPO is called a "Public" of

One good reason is because it's illegal. You can't just go around selling shares in your company to anyone. There is a reason why an IPO is called a "Public" offering and why there is tons of regulations and paperwork. This is to prevent scams, pyramid schemes, and the like. And forming a non-public company with more than 20 or so shareholders is a good recipe for a completely unmanageable entity. So while the basic idea seems good, it would be difficult to pull off. I guess a ransom-type deal would work better: "Dear Users, we have a $1.1 billion buyout offer. But you could just pay us $13 each and then assuming we get $1.1 billion in revenue, we promise to maintain the service for 2 years."