It all depends upon the terms. Private Equity will require some incentive from the company (i.e. issue significantly discounted shares) - no one just "gives" money to a start up without the potential for covering their capital risk. In exchange for the discount, the company could lock it up for a certain restriction period. The net effect is that you rob Peter to pay Paul - delaying dilution by refinancing your debt. If this is done in conjunction with a substantial increase in sales while simultaneously tightening the G&A overhead burden, you begin to chip away at the spiraling effect of ongoing dilution.
My observation is that the Company has really dug a pretty deep hole for itself - I am not so sure they can find a reasonable deal out there - it will have to be done in small increments.
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