The actual transaction is framed in terms of generating more shares in the company, such that existing shares represent an ever smaller piece of the total pool. What you're suggesting would be the founders selling a fraction of their shares to the new investors, while keeping total shares the same. Institutional investors are highly opposed to that, for a variety of reasons, including because they want founders to remain bought in to the company. (Some institutional investors will allow founders to "take some money off the table" to a small extent, but that's the exception and not the norm, and it's viewed as a favor to the founders. More cynically, institutional investors don't want founders to have financial independence before the company fully succeeds.)