Option Pool Calculator

What is an employee option pool?

A block of company shares reserved for future employee grants. Most seed-stage startups reserve 10–15% of the fully diluted cap table. YC companies typically set the pool before the seed round so it is ready for early hires.

How do you calculate an option pool?

Decide the pool percentage you want of the fully diluted company, then create pool shares = existing shares × P ÷ (100 − P). With 8,000,000 existing shares and a 10% target, that is 888,889 pool shares and a fully diluted total of 8,888,889.

How big should my option pool be?

At pre-seed and seed, 10% is the usual target; Series A investors often push for 12–15%. Size it to your hiring plan for the next 18–24 months — list the roles you need, budget 0.25–2% per early employee, then add buffer.

How do you calculate option pool expansion dilution?

Expansion dilutes everyone who is not in the pool. New pool shares = existing shares × (new pool % − old pool %) ÷ (100 − new pool %). Your ownership after = your shares ÷ new fully diluted total. Going from 10% to 15% on an 8,888,889-share cap table costs an existing 45% holder about 2.6 percentage points.

What is the option pool shuffle?

When investors require the pool to be created pre-money, it comes entirely out of founder ownership, not theirs. A 15% pre-money pool can cost founders 3–4 percentage points more than if it were created post-money.

How do you calculate valuation with an option pool?

Investors quote a pre-money valuation that already assumes the new pool exists, so the effective price per share is pre-money ÷ (existing shares + new pool shares). Adding a pool pre-money lowers your real share price without changing the headline valuation — which is exactly why the pool size is negotiated alongside the number.

What is the option pool multiplier?

If you want the pool to be P% of the post-pool company and founders hold F% today, the pool shares = founder shares × P / (100 − P). At 10% target on 8,000,000 founder shares, that is 888,889 pool shares.

How much equity should go into an employee stock option pool?

10% of the fully diluted company at seed, 12–15% by Series A. Build it bottom-up from your hiring plan: early engineers take 0.25–1%, a first VP 1–2%, a cofounder-level hire 2%+. If the 18-month plan needs 6.5%, ask for 8% and keep the difference.

How do you set up an employee stock option pool?

Adopt an equity incentive plan by board and stockholder approval, authorise the pool shares, get a 409A valuation to set the strike price, then issue grants under the plan with a standard 4-year, 1-year-cliff schedule. Most startups do this at or just before their first priced round.

Is this option pool calculator free?

Yes. No signup, nothing stored — the math runs in your browser.