"... a flaw with the system. Why can't we just give out percentages, and have that percentage stay constant?"<p>I can't tell if this is rhetorical question or not. But I'll answer as if it was serious.<p>First of all, a company can do whatever it wants. So if you control a company, you can give out percentages. That's your prerogative. In reality, you wouldn't want to ever do that, because it would eliminate your ability to:<p>- Raise additional money.<p>- Hire new employees.<p>- File for an IPO.<p>- Merge with another company.<p>- Purchase another company.<p>However, if you want to start a company with a few friends, and never take additional money, and never expand beyond the founders, and never sell or merge, then you can certainly structure it in a way that each founder has a fixed percentage of shares. But that would be a very unusual business.