> I don't like it, since it can essentially screw the company out of cash,
I'm not saying you're one of these people, but there's a general meme of non-financial people who don't understand that justifications for raising capital can indeed be to liquidate investors (or founders) positions in companies. This is very normal. Investors should know (I believe they're legally obligated) what their capital is being used for. If they don't believe their capital will increase the value of the business, then they simply wouldn't invest.
The market should correct itself in this case (if not leaving enough cash in the company is a problem).
I'm not saying you're one of these people, but there's a general meme of non-financial people who don't understand that justifications for raising capital can indeed be to liquidate investors (or founders) positions in companies. This is very normal. Investors should know (I believe they're legally obligated) what their capital is being used for. If they don't believe their capital will increase the value of the business, then they simply wouldn't invest.
The market should correct itself in this case (if not leaving enough cash in the company is a problem).