Fully diluted shares explained for startup employees
Why fully diluted share count is the missing context behind every option grant.
It is the denominator
Fully diluted shares are the denominator used to translate option count into ownership. If you have 10,000 options and the company has 10,000,000 fully diluted shares, the grant is roughly 0.1% before future dilution.
That percentage is the starting point for scenario modeling.
The number includes more than common shares
Fully diluted share count usually includes common shares, preferred shares, outstanding options, warrants, and shares reserved for the option pool.
That is why it is more useful than just asking how many common shares currently exist.
It changes over time
New financing rounds and option pool increases can expand the denominator, reducing your ownership percentage.
Grantwise models this as dilution so the output reflects the stake you may still own at exit.
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Turn the theory into numbers.
Use the checker to model dilution, strike cost, tax, AMT exposure, and liquidation preference across four outcomes.
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