Ownership Percentage
Your shares divided by total fully diluted shares, expressed as a percent of the company you own.
Definition
Ownership percentage is your share count divided by the total fully diluted share count, expressed as a percentage. This tells you what fraction of the company you own, and by extension, what fraction of the exit proceeds you would receive (after accounting for liquidation preferences). Always calculate ownership on a fully diluted basis to get an accurate picture.
Why it matters
Ownership percentage is the most important number to understand when evaluating your equity. A grant of 50,000 shares means nothing without knowing the total share count. Always ask for the fully diluted share count when negotiating an offer.
Example
You have 50,000 options. The company has 50M fully diluted shares. You own 0.1%. If the company exits for $500M and there are no liquidation preferences, your shares are worth $500K (minus strike price and taxes).