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If a startup can always issue new shares, what value is there to stocks/options?
Companies normally do not give you X% of shares, but in effect give you a fixed "N" number of shares. The "N" may translate initially to X%, but this can go down. If say we began with 100 shares, A holding 50 shares and B holding 50 shares. As the startup grows, there is need for more money. Create 50 more shares and sell it at an arranged price to investor C. Now the percentage of each investor is 33.33%. The money that comes in will go to the company and not to A & B.   From here on, A & C together can decide to slowly cut out B by, for example: After any of the above the % of shares held by B would definitely go down.