Figuring out the right option pool for founders and early hires is a minefield. Most founders give away too much equity too early without tying it to actual business milestones — here is how to avoid that trap.

A properly sized option pool reserves just enough equity to attract key talent without prematurely wrecking your cap table.

• Benchmark: 10-15% post-seed pool size.
• Rule: Only grant equity when it directly accelerates your path to revenue.
• Warning: Creating a massive pool before product-market fit is a fast track to dead equity.

Here is a practical checklist for sizing your equity reserves based on your current stage.

• Scenario A: Pre-product-market fit. Keep the pool tight at 5-10%. Avoid early cap table mistakes by keeping advisor grants strictly vested and tied to deliverables.
• Scenario B: Post-seed scaling. Expand the pool to 10-15%. Rely on trusted cap table data from LTSE to ensure you remain competitive when hiring specialized operators.
• Scenario C: Advisor equity. Set aside 1-2% total. Never give more than 0.1-0.25% to a single advisor. Review typical SaaS option pool benchmarks to compare your distributions against market standards.

Standard seed-stage option pools range from 10-15%. Wait until Series A to expand it to 15-20%. According to Index Ventures' talent guide, over-allocating early heavily dilutes founders for no strategic reason.

Sample math.
If you authorize 10,000,000 total shares and need a 10-15% option pool for a seed round, you will reserve between 1,000,000 and 1,500,000 shares. A founding engineer might get a 1-2% slice of the fully diluted cap table, which equates to 100,000 to 200,000 shares.