Fully diluted shares is the total share count of a company if every outstanding option, SAFE, convertible note, and unissued option-pool share were converted into actual stock today, not just the shares that have been formally issued.
Ownership percentage only means something when it's calculated on a fully diluted basis. A founder who owns 8 million of 10 million issued shares looks like they own 80%, but if there's an unissued 2-million-share option pool and a SAFE that converts into another million shares, the real fully diluted percentage is meaningfully lower.
This is the figure investors and acquirers actually use, and it's the same number a cap table exists to track accurately. Reporting ownership on an issued-shares basis instead of a fully diluted basis, even unintentionally, is one of the more common ways a cap table ends up wrong.
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