Before an IPO, the company will have an internal capitalization structure which determines how many shares are already owned by the promoters, employees, investors etc.
Aug 05 2013 12:07 PM
For example a cap structure will look like this
Founder 1 - 500 shares
Founder 2 - 400 shares
Investors - 50 shares
Employees - 50 shares
So total outstanding shares is 1,000 shares.