The definition of 'Dilution'

Dilution refers to the reduction in the ownership percentage that an investor holds in a company that is most commonly caused by the issuing of new shares.

While dilution is often seen in a negative light, so long as investors are given the right to top up their percentage in a funding round (pre-emption rights) dilution is more commonly a natural consequence of a company growing quickly and needing more capital to do so.