Fully diluted

'Fully diluted' (often abbreviated FD) means a share count or ownership percentage is measured against the total the company could have outstanding if every option were exercised and every convertible instrument converted — as opposed to 'outstanding,' which counts only shares actually issued right now. Almost every ownership percentage quoted in a term sheet, cap table, or SAFE conversion is fully diluted; it's the only apples-to-apples basis for comparison.

Why outstanding-only numbers mislead

If a company has 7,000,000 shares outstanding but a 1,000,000-share unallocated option pool and a SAFE that will convert into roughly 400,000 shares, quoting ownership against the 7,000,000 outstanding figure overstates everyone's real percentage — the moment the pool is granted and the SAFE converts, the denominator grows and every existing percentage shrinks. Fully-diluted math bakes that growth in up front so the number doesn't move again when those events actually happen.

What counts, precisely

A standard FD count includes: issued common stock, issued preferred stock, granted options (vested or not), the unallocated portion of the option pool, and outstanding convertibles at a stated conversion assumption (typically their cap-implied share count). Warrants, if any, are included the same way as options.

The assumption to always ask about

Because SAFEs don't have a fixed share count until they actually convert, any 'fully diluted' figure quoted before a priced round embeds an assumption about how those SAFEs will convert. Ask what assumption was used — Foundily's SAFE and cap table calculators show the assumption explicitly rather than hiding it inside a single number.