Yes, capital investment will be certainly almost diluted. Successful beginnings host many rounds of funding, up to an IPO (Initial Public Offering). For each financing, the startup issues additional shares for new investors, and as the value of the company increases with each funding round, it has a normal and healthy pace.
For example, the first Facebook investor, Peter Thiel, originally bought ~10% of the company for $500.000. By 2011, this stake was diluted to less than 3% but is estimated to be worth around $2 billion.