I don't think YC ever asks for no-dilution. A founder can not cheat because of various reasons: 0. Founders will have to dilute themselves to dilute YC 1. Inves

I don't think YC ever asks for no-dilution. A founder can not cheat because of various reasons: 0. Founders will have to dilute themselves to dilute YC 1. Investment is done based on a contract, which defines and controls the power that founders have. They can't issue any number of shares to themselves without putting in more money. 2. If somehow, founders are able to cheat YC that would destroy their credibility and their market valuation, resulting in huge financial loss. EDIT: read this: http://www.paulgraham.com/angelinvesting.html http://www.paulgraham.com/angelinvesting.html