when a company issues shares it dilutes the value of existing shares in the market potentially devaluing the equity held by older investors in order to raise the value of outstanding shares the company must either increase its market capitalization or issue a buyback 
allow companies to raise cheaply and easily unlike loans or bonds equity capital is interest free and does not have a set repayment schedule stock issuances can dilute the value of existing shares company founders may lose control over the direction of their company strict securities laws and transparency requirements make it