Anytime a company takes investments they have to decide what portion of the company is for sale.
If they decide to sell 25% of the company through an IPO, then 75% of the company remains in the hands of the founders, initial investors, officers and early employees.
Over the decades after the IPO the entire company may be sold to individual investors.
When Microsoft was founded there were two owners.
Investing in Initial Public Offerings (IPOs)
Now Bill gates owns a minority share of the company
For the first time in Microsoft's history, nearly 40 years after Bill Gates founded the company in 1975, he is no longer its largest individual shareholder. That title now belongs to Steve Ballmer, who served as CEO from 2000 to 2014.
In an April 30 filing, Gates revealed that he sold 4.6 million shares for roughly $186 million pre-tax.
He now owns 330 million shares, 3 million less than Ballmer, his Harvard pal who later joined him at the Seattle company. Gates’ cofounder Paul Allen, who apparently had a smaller stake than Gates from the outset, sold most of his shares years ago.
Gates, Ballmer and Allen all amassed massive fortunes building Microsoft into a software giant.
Gates became the wealthiest man on the planet, with a fortune of $77 billion. Ballmer got $20 billion, good for 34th richest in the world.
And Allen, one of Gates’ childhood buddies, is now worth $16 billion, making him the 55th richest.
Gates remained heavily involved in company operations until June 2008, when he stepped back to focus on giving away the fortune Microsoft made him.
Gates has been the richest man in the world for 15 of the last 20 years, despite having already given away at least $28 billion.
He now owns 4% of Microsoft, a stake worth $13.3 billion. The bulk of his fortune is kept in his private firm Cascade Investment.
When they initially took on investors they didn't sell 90% of the company. But over time those initial officers have sold the majority of their shares.