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Markets aren't efficient in any space ;)... (review the assumptions required for an efficient market, so see how reality violates all of them with consequences, or just look at the empirical, historical data; also see behavioral finance literature).

All existing investors/shareholders are diluted in new rounds, almost always. And all shareholders -- including investors -- in high-tech startups are minority shareholders (less than 50%), with the exception of single founders early on, typically. (Minority shareholders, investors especially, still have certain rights.)

I hope these notes help!

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