Fully diluted shares is the count assuming all outstanding stock plus all convertibles are converted to common. Convertibles include options, warrants, convertible notes, SAFEs, and RSUs, with fully diluted serving as the denominator for ownership percentages in venture financings and valuation calculations, providing a worst-case view of the cap table. It is the share count that matters most for financing discussions because it tells investors and founders what ownership looks like if everything that could convert does convert.
The components of fully diluted shares: