When a company starts off, 100% of shares are owned by cofounders. By the time a company is considering an IPO, the shares are owned like 70% by cofounders and 30% by options-holders like employees (I don't know - please, just go with the example).
So, when an IPO happens... Doesn't the company need to purchase the shares from the cofounders? But isn't that like selling to yourself?
Only after purchasing the shares from the cofounders, can the company sell its shares to the public in a secondary offering? Am I right? What is this first process called?
None of the articles about IPO cover this step. They assume that the company already owns its own shares. But this is not true, right? It's the confounders and option-holders that own it... right? It has to go from primary share holders -> company -> secondary share holders... Right?
Unfortunately, finance literature always assumes you understand some assumptions. Please clarify this detail, it will help a lot.