Ownership Percentage
The portion of a company that an individual or entity owns, typically expressed as a percentage of total outstanding shares.
Definition
Ownership percentage represents how much of a company an investor, founder, or employee owns through equity stakes. It determines their share of profits, voting rights, and proceeds in exit scenarios like acquisitions or IPOs.
How to Calculate
Basic Formula:
Ownership % = (Shares Owned ÷ Total Outstanding Shares) × 100
Fully Diluted Basis:
Includes all potential shares (options, warrants, convertibles)
Real-World Example
Founder Ownership: Founder owns 2M shares out of 8M total outstanding shares
Ownership percentage: (2M ÷ 8M) × 100 = 25% ownership of the company