"Having institutional investors on the register does nothing for...

"Having institutional investors on the register does nothing for shareholder value" - that says a lot about your knowledge (or lack of it) in relation to investing. Run a regression model for returns after an institutional heavy raise, and compare to returns after a retail heavy raise. Even intuitively it makes sense, retail have limited access to capital. They often participate solely for a quick profit and most certainly won't continue to accumulate large amounts of shares on market. Instos use raises to acquire initial positions, from which continue to accumulate on top of thanks to their large cash reserves. They are also less emotional, and acquire positions too large to be immediately flipped for a quick buck (sophs are often different - I typically see them as the same as retail)

Your claim that dilution is necessarily bad for shareholders also reveals a further lack of knowledge, as you fail to acknowledge that raises can be accretive. So long as the benefits (increased growth) outweigh the costs (dilution), shareholders benefit from the additional SOI. Companies are listed on public exchanges solely for the purpose of accessing equity capital. You can't gain in the long term without a bit of short term pain