What Is Common on As-Converted?

Common on as-converted expresses ownership as if all preferred stock converted to common, on a fully diluted basis including options and warrants.

How it works

Cap tables list separate preferred series with liquidation preferences and conversion ratios—usually 1:1 unless adjusted. An as-converted column applies those ratios and adds unissued option pool shares to show total diluted common equivalents. A founder might hold 40% of outstanding common but 28% as-converted after Series A and B preferred and the pool. Investors quote ownership “on an as-converted basis” in term sheets for pro rata and anti-dilution context. At exit, preferred converts when common proceeds per share exceed the preference; until then, as-converted is hypothetical for economics but real for many voting calculations if preferred votes on an as-converted basis.

Why it matters

• Founders: Dilution from new rounds hits as-converted percentages hardest. Negotiating option pool increases in pre-money valuation uses as-converted math.
• Investors: Ownership targets and pro rata rights are tracked as-converted. Misaligned cap table exports cause closing delays.
• Operators: Equity grant sizing and 409A discussions reference fully diluted as-converted share counts.

Common mistake

Confusing as-converted ownership with cash proceeds at exit. High as-converted ownership for preferred still yields zero if liquidation preferences absorb the sale price.

Related ideas

Common stock, preferred stock, fully diluted, conversion rights, and liquidation preference are the adjacent cap-table concepts.