Whenever anyone creates a company, the owner(s) create a certain number of shares that have a "par" value based on how much money was invested by the owners to create the company.

Say you and a buddy create a lawn mowing company. You each put $100 in to get started. You do the paperwork with your state, pay a fee and create "Buddy's Mowing" with 1,000,000 (500,000 shares to each of you) shares of stock. Each share of stock would be worth $0.0002 ($200/1,000,000).

10 years later, you are the dominant mowing force in your city and you decide to go public. You find a broker to represent you, and an exchange and each of you decide to offer 100,000 shares of stock at $10. So you get $1M from the investors who buy those shares and you still each have 400,000 shares, now worth $10 each ($4M worth of stock each).