Understand the ownership denominator
See this course’s project requirements
An equity-offer file with grant terms, vesting, exercise-cost scenarios, dilution, deadline questions and a cash-based offer comparison.
Keep your working files in your own notebook or software. Save a private description, checklist, and work link in My Proof.
What to include
- An offer term sheet separating salary and contingent equity.
- A vesting calendar and departure scenario. An exercise-cost worksheet with three hypothetical price scenarios.
- A simple dilution calculation and denominator questions.
- A departure deadline map and tax-adviser question list.
- A complete equity-offer comparison with a conditional recommendation.
Review and revise
Use these criteria to check your work and choose what to improve.
- Calculations reconcile to the supplied records, with units and dates labeled.
- Assumptions and missing information are visible, including the changed scenario.
- The recommendation follows the evidence and explains an important limitation.
- The six lesson outputs form a usable handoff that another learner can check.
Want more background?
The idea in everyday life
Assume, only for this math exercise, that 1200 options are exercised and all shares have equal economic rights. Before a new issue there are 120000 total shares including these 1200. The company then issues 30000 additional shares. Ignore preferred rights and option pools here; ask about them in a real offer.
A share count alone does not show an ownership percentage. The denominator and share rights matter.
Understand the ownership denominator — worked practice
A share count alone does not show an ownership percentage. The denominator and share rights matter.
Assume, only for this math exercise, that 1200 options are exercised and all shares have equal economic rights. Before a new issue there are 120000 total shares including these 1200. The company then issues 30000 additional shares. Ignore preferred rights and option pools here; ask about them in a real offer.
1. Compute original percentage
Divide 1200 by 120000 and multiply by 100.
You should see: Illustrative ownership is 1%.
Both numbers use the same share basis.
2. Update denominator
Add 30000 new shares.
You should see: Total shares become 150000.
New issuance changes the denominator.
3. Recalculate
Divide 1200 by 150000.
You should see: Illustrative ownership becomes 0.8%.
The learner’s count did not change.
4. Explain limits
Note equal-rights assumption and missing fully diluted definition.
You should see: Share percentage alone does not establish eventual payout.
Different rights and dilution bases affect comparisons.
What to finish
A simple dilution calculation and denominator questions.
Watch for this
Comparing two option counts without the total share basis.
How can I tell I understand it?
Explain your calculation or classification and reproduce the changed case without copying the worked result.
Quick knowledge check
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Go to the knowledge checkOptional course overview video · same video as Lesson 1
What are stock options, and how do they work?
From Carta. Watch here or open it on YouTube .
Optional course overview. Follow the written steps below at your own pace.Tools, templates, and lesson sources
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Source & access notes · checked 2026-09-12
Inspected distinction between employee options and employee stock ownership retirement plans.
Access: Public page inspected without a sign-in; linked services may have separate requirements.
Reuse: Link to the original. Free reading does not imply permission to reproduce the page; lessons and fixtures here are original.
Source & access notes · checked 2026-09-12
Inspected compensatory securities exemption and resale restrictions. Fictional terms control all exercises.
Access: Public page inspected without a sign-in; linked services may have separate requirements.
Reuse: Link to the original. Free reading does not imply permission to reproduce the page; lessons and fixtures here are original.
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