Say you have 50% of the company and your cofounder has the other 50%. That's all the stock, right?
If you want to raise money you need to sell some stock. So the company creates new stock and sells that -- increasing the total number of shares. You don't get any of that new stock yourself, so your total ownership percentage goes down.
If you want to raise money you need to sell some stock. So the company creates new stock and sells that -- increasing the total number of shares. You don't get any of that new stock yourself, so your total ownership percentage goes down.