Redefining dilution

Founders like Mark Zuckerberg care deeply about dilution because they want to remain in complete control of the company for as long as possible. If you&#x27;re like that, the percentage matters more than the absolute dollar value of your shares.<p>Investors also often care about having the power to dictate the terms of future rounds and&#x2F;or acquisitions. Dilution reduces this power, and humans are known to sacrifice a lot of good things in order to obtain and maintain power. Feeling powerless is very different from being penniless. This might explain why so many people are obsessed with percentages even at the cost of dollar values.

I come from a non-finance background, but does anyone else find the concept of dilution rather inane? Wouldn&#x27;t it be much more intuitive and rational for all parties involved if new shares couldn&#x27;t be issued but rather existed strictly as a percentage of the company which can only be bought from some previous owner(s)? Who would be initially defined at incorporation.<p>I&#x27;m sure there is some reason the system is how it is, but I have no idea why that is the case.

This seems to be missing something very important to me. Yes if your ownership goes from 10% to 8% but of a more valuable company you don&#x27;t lose money. But presumably you were hoping the company would do well and be worth 10 times as much in the future, and your 2% loss of that future value is much more significant.