Guide: Option Pool Calculator & Sizing Benchmarks
last updated: Jan 27, 2026
TL;DR
An option pool calculator determines the percentage of equity reserved for future employees. In 95% of seed deals, this pool is calculated on the post-money valuation but subtracted entirely from your pre-money valuation.
The Cheat Code:
The Cheat Code:
- Benchmark: Seed stage pools typically land in the 11–13% range (Median: 11.8%, Source: Carta 2024).
- The Trap: A "standard" 20% pool is often an arbitrary investor ask to lower their effective price per share.
- The Fix: Build a hiring plan first. Never agree to a flat percentage without mapping specific roles for the next 18 months.
- The Warning: The "Pre-Money Shuffle" forces founders to pay for 100% of the dilution, protecting the new investors completely.
Glossary
- Option Pool: Shares set aside to attract and retain talent, usually authorized before a funding round closes.
- Pre-Money Shuffle: The investor tactic of requiring the option pool to be included in the pre-money valuation, effectively forcing founders to pay for 100% of the dilution.
- Fully Diluted Basis: The total number of shares assuming all convertibles, warrants, and options are exercised.
- Promised Options: Grants committed to early employees (e.g., "1% of the company") that must be formalized in the pool calculation.
How to Calculate the Shuffle
Use this Dilution Impact Table to see exactly how increasing the option pool size reduces your ownership. The math below assumes you are raising $1,000,000 on a $4,000,000 Pre-Money Valuation ($5M Post-Money).
The Mechanics:
The Mechanics:
- No Pool Scenario: You own $4M / $5M = 80%. Investor owns 20%.
- The Shuffle: Investors demand a 20% pool ($1M value). This $1M is carved out of your $4M pre-money. Your effective valuation drops to $3M.
Sample Math:
If you agree to a 20% pool on a $5M post-money valuation: $5,000,000 x 20% = $1,000,000 allocated to the pool. Since the investor fixed their ownership at 20% ($1M), the remaining $3,000,000 is yours. You went from 80% ownership (no pool) to 60% ownership (with pool). You paid for the entire pool.
If you agree to a 20% pool on a $5M post-money valuation: $5,000,000 x 20% = $1,000,000 allocated to the pool. Since the investor fixed their ownership at 20% ($1M), the remaining $3,000,000 is yours. You went from 80% ownership (no pool) to 60% ownership (with pool). You paid for the entire pool.
Benchmarks
Do not accept the "standard 20%" myth without pushing back. Data from 2024–2025 shows actual usage is significantly lower.
- Seed Stage Median: 11.8% (Source: Carta).
- Seed Top Quartile: 16.2%.
- Series A Expansion: Pools typically expand to 15–20% during Series A to accommodate executive hires.
- Usage Reality: Most startups only utilize 60–70% of their pool before the next funding round. If you over-size the pool now, you are diluting yourself for hires you won't make.
X vs Y
Pre-Money Pool vs. Post-Money Pool
Risks
- The "Unused Equity" Trap: If you allocate 20% but only grant 10% before the next round, that unissued 10% usually vanishes into the ether during the next priced round or gets re-absorbed, meaning you suffered dilution for nothing.
- Signaling Risk: A pool smaller than 10% signals you don't plan to hire aggressive talent, which can worry investors about your scaling capability.
- Recruiting Drag: If your pool is too small, you may run out of equity for a critical late-stage hire (e.g., a VP of Sales), forcing a painful "top-up" that dilutes everyone again.
Will an optimized option pool actually get you to $10k MRR?
Mastering the option pool calculator is a necessary step for cap table hygiene, but it is not the whole picture. Saving 5% of your equity feels like a victory, but 70% of zero is still zero. If you spend three weeks arguing over a 2% difference in the pool while your sales pipeline is empty, you are optimizing for a liquidation event that will never happen.
The "bridge logic" is simple: Investors ask for a larger pool to de-risk their investment. You must fight for a smaller pool based on a real hiring plan, but get back to selling immediately after the docs are signed. Execution solves dilution.
The "bridge logic" is simple: Investors ask for a larger pool to de-risk their investment. You must fight for a smaller pool based on a real hiring plan, but get back to selling immediately after the docs are signed. Execution solves dilution.
FAQ
- You:What is the average option pool size for Seed rounds?Guide:Most seed stage deals settle between 10–13%. Series A deals often expand this back up to 15–20%. If an investor demands 20% at the seed stage without a massive hiring plan to justify it, they are lowering their effective price per share.
- You:Does the option pool come out of pre-money or post-money?Guide:In roughly 90–95% of venture deals, the option pool is created from the pre-money valuation. This means the dilution hits the existing founders and shareholders exclusively, while the new investors buy in after the pool is created.
- You:Can I reduce the option pool later?Guide:Rarely. While unissued options technically remain in the company, they are usually rolled into the next round's calculations or "topped up." It is mathematically difficult to reclaim that equity into your personal holding once signed.
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