Option Pool Calculator for Pre-seed Technical Founder

Setting Up Your Option Pool

An employee option pool is essential for attracting top talent to your startup. The size of your option pool directly affects founder dilution, so understanding the tradeoffs before negotiating with investors is critical.

Option Pool Impact on Valuation

Investors typically require the option pool to be created from pre-money valuation, increasing founder dilution. Our calculator shows you exactly how different pool sizes affect your ownership stake.

How to Use the Option Pool Calculator

1. Set your pre-money valuation and round size
2. Adjust the option pool percentage to see dilution impact
3. Compare pre-money vs post-money option pool creation
4. Plan your hiring budget against available options

When to Use This Calculator

• An investor's term sheet specifies an option pool size and you want to understand the dilution impact
• You are planning hires for the next 12-18 months and need to size your pool accordingly
• You want to compare the founder dilution difference between a 10%, 15%, and 20% pool
• You are granting options to a new hire and want to check how much of the pool remains

Key Metrics and Formulas

The option pool shuffle is a well-known negotiation tactic: investors ask for the pool to be created from pre-money valuation, which means founders bear 100% of the dilution. The math: Effective Pre-Money = Stated Pre-Money - Option Pool Value. So a $10M pre-money with a 20% option pool on $2M raised means founders effectively get a $8M pre-money valuation. Our calculator shows both the stated and effective pre-money, along with founder ownership before and after the pool is created.

Common Mistakes to Avoid

• Accepting a larger pool than you need: If you only need 12% for planned hires, negotiate down from the standard 20% ask
• Not mapping the pool to a hiring plan: Show investors exactly which roles and grant sizes justify the pool size
• Ignoring the pre-money vs post-money distinction: Where the pool comes from changes your effective valuation significantly
• Granting too many options to early hires: Senior hires at seed stage should receive 0.5%-2%, not 5%+