Comments on: What does fully-diluted capitalization mean? http://www.startupcompanylawyer.com/2008/08/17/what-does-fully-diluted-capitalization-mean/ Venture capital, seed financings, convertible note bridge debt, M&A, option vesting and other matters explained for founders and entrepreneurs Tue, 10 Aug 2010 22:20:47 +0000 http://wordpress.org/?v=2.9 hourly 1 By: Yokum http://www.startupcompanylawyer.com/2008/08/17/what-does-fully-diluted-capitalization-mean/comment-page-1/#comment-3196 Yokum Thu, 15 Jul 2010 23:32:51 +0000 http://www.startupcompanylawyer.com/?p=96#comment-3196 @Sbreak - No. Unissued stock is not part of the fully-diluted calculation. I suppose one needs to assume that if the employee is diluted by future issuances, other people would also be diluted, which would be enough of a check and balance to make sure future dilution is not arbitrary. @Sbreak – No. Unissued stock is not part of the fully-diluted calculation. I suppose one needs to assume that if the employee is diluted by future issuances, other people would also be diluted, which would be enough of a check and balance to make sure future dilution is not arbitrary.

]]> By: Sbreak http://www.startupcompanylawyer.com/2008/08/17/what-does-fully-diluted-capitalization-mean/comment-page-1/#comment-3185 Sbreak Fri, 11 Jun 2010 03:03:48 +0000 http://www.startupcompanylawyer.com/?p=96#comment-3185 [Speaking from the perspective of a person currently reviewing an offer letter from a startup]<br><br>Shouldn't authorized, but unissued stock be counted in the fully-diluted cap #? If not, then in situations where there are sizable amounts of authorized, but unissued stock, how is the prospective employee to accurately evaluate options being offered to him/her if he/she doesn't know that #? [Speaking from the perspective of a person currently reviewing an offer letter from a startup]

Shouldn't authorized, but unissued stock be counted in the fully-diluted cap #? If not, then in situations where there are sizable amounts of authorized, but unissued stock, how is the prospective employee to accurately evaluate options being offered to him/her if he/she doesn't know that #?

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