Issued and outstanding is the number of shares that exist in shareholder hands today — the baseline count before you layer on unexercised options, warrants, or convertible notes.

How it works

A company’s charter authorizes a maximum number of shares. The board issues a subset to founders, investors, and employees. Outstanding means those shares are still held by someone other than the company itself (treasury shares are issued but not outstanding).

On a typical seed cap table you might see: 8 million shares issued and outstanding to founders and investors, plus 2 million reserved in the option pool that are not yet issued. Fully diluted share count would be 10 million; issued and outstanding is 8 million.

Why it matters

• Founders: When an investor asks for “5% of the company,” clarify whether that is basic (issued and outstanding) or fully diluted. The gap can be large after several rounds.
• Investors: Liquidation waterfalls, anti-dilution, and voting agreements reference specific share definitions. Diligence should reconcile the cap table export with charter, stock purchase agreements, and option ledgers.

When companies repurchase shares into treasury, issued count stays the same but outstanding falls. Convertible notes and SAFEs are not shares until conversion — they affect fully diluted models but not issued and outstanding until they close in a priced round.

Investor updates sometimes report “shares outstanding” from the transfer agent; reconcile that number with Carta or Pulley before board meetings. Discrepancies often trace to unexercised options, pending transfers, or stale exports.

Common mistake

Treating the option pool as already issued. Reserved but ungranted options are not issued and outstanding until grants are made and, for options, exercised.

Related ideas

• Fully diluted share count
• Authorized shares vs issued shares
• Cap table reconciliation