Denominator comparison
Basic vs Fully Diluted ownership: why the percentages differ
Basic ownership divides existing shareholdings by outstanding shares. Fully Diluted ownership adds the potential shares included by the chosen convention. A lower FD percentage can therefore appear without any new common shares being issued or any shares being sold by that holder.
| Measure | Basic | Full Pool FD | Granted Only FD |
|---|---|---|---|
| Denominator before grant | 1,000,000 | 1,100,000 | 1,000,000 |
| Founder A before grant | 70% | 63.64% | 70% |
| Denominator after 40,000 awards granted | 1,000,000 | 1,100,000 | 1,040,000 |
| Founder A afterwards | 70% | 63.64% | 67.31% |
| Investor A afterwards | 30% | 27.27% | 28.85% |
| Employee group afterwards | 0% | 3.64% | 3.85% |
On this page
Name the denominator before comparing two percentages
At 1 January 2026, Founder A holds 700,000 common shares and Investor A holds 300,000. Treasury is zero. A pool reserves 100,000 unexercised option units. Basic ownership is 700,000 / 1,000,000 = 70%. Full Pool FD ownership is 700,000 / 1,100,000 = 63.64%. These are two measurements of the same opening position.
Basic asks how the outstanding shares are allocated. Full Pool asks how ownership looks with all the included unexercised pool capacity. Granted Only includes outstanding grants but excludes the still-ungranted reserve. Neither label is meaningful without its inclusion policy.
Grant 40,000 units: redistribution or a larger denominator?
The native case grants 40,000 units to Employee Group from the existing 100,000 reserve. Grants are immediately vested for this example but remain unexercised. Reserved capacity stays 100,000; 60,000 units are still available and 40,000 are outstanding awards. Common shares remain 1,000,000.
Full Pool already included all 100,000 units. The grant redistributes its 9.09% FD position into 5.45% unallocated and 3.64% granted, leaving Founder A at 63.64%. Granted Only moves from no included awards to 40,000, so its denominator increases to 1,040,000 and Founder A becomes 67.31%.
Do not add the 40,000 grant to the full 100,000 reserve again. That would count part of the pool twice and incorrectly report 1,140,000 FD units. A grant from existing capacity and a top-up of capacity are different events.
Match the basis to the question
| Basis | Useful question | What it does not establish |
|---|---|---|
| Basic | How are current outstanding shares allocated? | Voting rights, preference economics or a legal entitlement to proceeds |
| Full Pool | What is the ownership denominator including all selected pool capacity? | That every reserved award has been granted or exercised |
| Granted Only | What is the denominator including outstanding grants? | That unused capacity has ceased to exist |
Ownership dilution is not diluted EPS
This is a point-in-time share-count convention. It is not weighted-average diluted earnings per share and does not apply a treasury-stock-method repurchase calculation to option proceeds. Keep time weighting, dilutive EPS rules and option fair value outside this ownership comparison.
The example assumes equal economic rights and no treasury shares. Different instruments or transaction terms can require a different definition of Fully Diluted. Write down the included instruments, pool policy and snapshot date rather than treating “FD” as a universal contractual definition.
Check the same grant under both policies
Import the Full Pool grant example or the Granted Only grant example. Under Ownership → Option Pool / ESOP, inspect the closing preview before applying anything. The pending grant has not already been written into the opening Cap Table.
Use the Cap Table workflow to build and reconcile the opening data. Use the option pool timing case when the question is who bears a new pool top-up. The implementation definitions are in share counts and Option Pool / ESOP.
Sources and conventions
Synthetic examples. Model-based results were reconciled with the current BalanceCheat calculations; assumptions, units and boundaries are specified in each example.