How do I calculate Option pool?

Use the formula(s) on this page. Keep inputs consistent by period and basis.

What are good benchmarks?

Benchmarks vary by model and stage. See Benchmarks on this page for ranges.

Inconsistent definitions/time windows; wrong basis (revenue vs gross profit).

Pitchkit

Back to Glossary

GLOSSARY

Option pool

Shares reserved for employee equity grants.

Why it matters

Attracts talent with equity compensation. Investors often require expanding the pool pre-round, diluting founders.

Benchmarks

Seed: 10-15% post-round; Series A: 15-20%. Depends on hiring plan and existing grants.

Worked example

Pre-round pool 8%. Investor requires 15% post-round. Founders absorb the 7% expansion before investment.

Common pitfalls

Not negotiating pool size; underestimating hiring needs; not understanding pool expansion dilutes existing shareholders.

Back to Glossary

GLOSSARY

Option pool

Shares reserved for employee equity grants.

Why it matters

Attracts talent with equity compensation. Investors often require expanding the pool pre-round, diluting founders.

Benchmarks

Seed: 10-15% post-round; Series A: 15-20%. Depends on hiring plan and existing grants.

Worked example

Pre-round pool 8%. Investor requires 15% post-round. Founders absorb the 7% expansion before investment.

Common pitfalls

Not negotiating pool size; underestimating hiring needs; not understanding pool expansion dilutes existing shareholders.

Option pool

Why it matters

Benchmarks

Worked example

Common pitfalls

Option pool

Why it matters

Benchmarks

Worked example

Common pitfalls

FAQs

Related terms

Why it matters

Benchmarks

Worked example

Common pitfalls

Why it matters

Benchmarks

Worked example

Common pitfalls

FAQs

How do I calculate Option?

What are good benchmarks?

Common pitfalls?

Related terms