Impact of selling company

Think about what happens when successful Entrepreneurs sell their company. What to do with money? In a financialised world, like this :

1. The founders don’t know what to do with it, so they give it to a large bank.
2. The bankers don’t know what to do with it, so they diversify by spreading it across a portfolio of institutional investors.
3. Institutional investors don’t know what to do with their managed capital, so they diversify by amassing a portfolio of stocks.
4. Companies try to increase their share price by generating free cash flows. If they do, they issue dividends or buy back shares and cycle repeats.