This was the mumble session held recently so that Dan could vocalize his thoughts and hopefully alleviate a lot of the misinformation floating about.
I know others have posted this already, but I am just trying to make it as obvious as possible given all considerations.
I never doubted the intentions of Dan or Stan. I also do not doubt their skills or intellectual capabilities.
Dilution is a technique which I define as a loan from shareholders to the receivers who would be the developers in this case.
1) The shareholders expect that the loaned buying power will result in an increase in their buying power.
2) There has to be a way for shareholders to vote on proposals because not every plan is a good plan.
3) There has to be a way to accurately measure whether or not the buying power of shareholders has increased or decreased after a specified period of time.
Basically when a bank or board of directors is given resources it is with strings attached. Those strings usually are that the board of directors meet some agreed upon objectives. The reason board of directors don't dilute shareholders over and over is because their jobs are at risk if they are foolish in their decision making.
So I can support dilution if there is a way to explain clearly what shareholders are lending to developers (buying power). It should be explained to shareholders where this buying power is going and exactly what it is going to be used for. It should be a proposal presented to shareholders and that proposal must be voted on. Finally there should be a way to measure the success or failure of the proposal in terms of how much buying power that proposal added.
Dilution isn't bad unless it's unlimited and with no strings attached. If it's limited, treated as a loan, and the goal of it is to increase buying power then I'd be all for it. For example if they dilute but design some functionality which increases the burn rate then it would only be temporary because there is a planned buy-back. Another example is if there is dilution but that dilution dramatically raises the market cap so that buying power can return then that could work too.
But you have to figure out what shareholders want to use to measure success of failure of a proposal.