Diluting is balanced by desire of the shareholders to keep larger portion of the company and need for the fresh funds.<p>I.e. seed investors + founders + pre-seed employees (+ISO pool) share all the stock between themselves. Now they are all in the same boat: additional stock is going to be issued for Series A investment and if investment is too large, all of them get diluted too match, if it's not enough, company dies. If you are employee, you can't do much about it, but founders and angels are going to look after their own interest and protect you as well. In this sense the most important number for pre-seed employee is the ratio of his stock to the founders stock.<p>It's possible to issue additional stock and just grant it to some parties to dilute other party, it's quite hard to do because if diluted party is dissatisfied (and it usually is), it exposes company to litigation.