Option pool
Shares set aside to grant to future employees, usually expressed as a percentage of the fully diluted company.
Why it matters
Watch when it is created. If the pool is carved out of the pre-money, existing shareholders absorb all of it and the new investor pays none. This "option pool shuffle" can cost founders more than a valuation reduction would.
A worked example
On a $10M pre-money, a 10% pool created pre-money is effectively a $1M cost borne entirely by you and existing holders. Created post-money, that cost is shared with the incoming investor.
What is typical
10% to 20% depending on stage and how many senior hires are planned. Push to size it against a real 12 to 18 month hiring plan rather than a round number.
Related terms
Pre-money valuation
What your company is agreed to be worth immediately before new investment goes in.
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