What happens to the shareholdings of existing shareholders when a company issues more shares. VCs and other early stage investors are sometimes able to negotiate Anti-Dilution Adjustments to prevent them from being diluted on subsequent funding rounds (usually on a Down Round) in which they don’t participate. Shareholders typically have rights under UK company law to participate Pro Rata on future issues of shares (Pre-emption Rights). However, Pre-emption Rights can be dis-applied with the approval of a Special Resolution passed by shareholders.