If the sole owner of a company gives away 20% in return for investment, who gets the money?

I am confused about how company investments work. Sometimes you hear that company owners sell a part of their company to raise money. What I don't understand is how this money goes to the company and not to the owner of the company. If I buy a share form someone on the stockmarket, that money doesn't go to the company but to the seller fo the share. Why and how is does it sometimes differ and how does the money end up with the company to use and not the company owner who sold his shares?

If the owner is selling a share of his company, he gets the money personally. If a company is issuing additional stock, thereby dilluting the ownership representation of the outstanding stock, the company gets the money presumably to be used to make the company bigger, and eventually all the stock more valuable.

You invest in a public company by buying stock on the stockmarket which is governed by rules & regulations...
There is no "owner" of a public company other than the person who owns the most stock and even he is not the actual owner in that he can do whatever he wishes with the company...You buy stock in a public company, the money goes to the company, not to the largest stockholder....
When you invest in a private / sole ownership company, you are
basically loaning money to the owner of the company in exchange
for his promise to give you 20% ownership of the company.

The ownership of a corporation is accomplished by splitting the equity (what's left after you subtract the liabilities from the assets,) into shares of stock. The number of shareholders can range from 1 to virtual infinity. There are two ways to buy stock, in a corporation (small or large.) You can buy stock from the company or you can buy pre-existing stock from a stockholder. In a corporation where only one person owns the stock, or even if he/she owns the majority of the stock, then for all purposes the business is the same as a sole proprietorship (except that there is no personal liability and the business is easier to sell.) When this scenario exists, the President (owner) can do pretty much as he pleases with anything in the company at his disposal, although the minority shareholders do have some rights.

Before you invest in a company that only has one shareholder you need to be very careful. There is very little motivation for the owner to value outside counsel or minority opinions. If you really like the co., get an agreement like convertible stock or preferred stock. Don't put all of your eggs in one basket. Protect yourself.