It doesn't reduce the amount available to investors. It just factors into the valuation. And then dilution happens across the board (generally). So after tak

It doesn't reduce the amount available to investors. It just factors into the valuation. And then dilution happens across the board (generally). So after taking a few rounds the founders have less of the company than if they had given less to the employee. Likewise, the founder will have less of the company if they give more to the VC. The question for Fred is if an employee is $1m and your cash is worth $1m -- should they both get the same valuation with respect to equity?