Question 1

What is the option pool shuffle?

Accepted Answer

When investors require an unallocated employee option pool to be in place before a round, they typically size the pool as a percentage of post-money fully diluted but place the pool in the pre-money valuation. That means founders bear the entire pool dilution while the investor's ownership is unaffected. The same 10% pool placed pre-money costs founders roughly 3 to 8 percentage points more than the same pool placed post-money.

Question 2

How big should my option pool be?

Accepted Answer

Build a bottoms-up hiring plan covering the next 18 to 24 months. Tally the equity grants you will need: VP/C-suite hires 1 to 3 percent each, senior individual contributors 0.1 to 0.5 percent, junior hires 0.01 to 0.05 percent, advisors 0.1 to 0.5 percent. The pool should match that plan. Investors will push for a blanket 10 to 20 percent; come in with the specific number and a defensible plan.

Question 3

Can I negotiate the pool to post-money?

Accepted Answer

Yes, but it is uncommon and tough. Better-known leverage points: smaller pre-money pool sized to your actual hiring plan, clawback unallocated pool back to founders if it is not granted within a defined window, or have investors share the pool dilution proportionally. Coming armed with a specific hiring plan is usually more productive than fighting the pre-money convention.

Question 4

What happens to the pool when the next round closes?

Accepted Answer

The pool typically gets topped up at each round, again sized as a percentage of post-money. If you grew the company and used most of the pool, the top-up is justified. If you barely used it, push back. The unallocated pool that did not get used is effectively shadow ownership the investors paid no extra for; you can negotiate to keep the unused portion as common stock for founders.

Question 5

Do unvested options count as dilution?

Accepted Answer

Yes, in fully diluted ownership terms. The cap table assumes all granted options will eventually vest and exercise. If an employee leaves before vesting, their unvested options return to the pool and reduce future dilution. Vested but unexercised options stay on the cap table.

Question 6

What is the standard vesting schedule?

Accepted Answer

Four-year vest with a one-year cliff is the standard in the US and UK. After the first year you vest 25%, then monthly increments for three more years. Some companies offer six-year vests, milestone-based vesting, or vesting acceleration on change of control. Always read the vesting terms in your option agreement carefully.

Role	Seed	Series A	Series B
VP Engineering	1.0 - 2.0%	0.5 - 1.0%	0.25 - 0.5%
VP Sales / Marketing	0.8 - 1.5%	0.4 - 0.8%	0.2 - 0.4%
Senior engineer (IC)	0.25 - 0.5%	0.10 - 0.25%	0.05 - 0.15%
Junior engineer	0.05 - 0.15%	0.02 - 0.08%	0.01 - 0.04%
Director of Product	0.5 - 1.0%	0.25 - 0.5%	0.10 - 0.25%
Advisor	0.10 - 0.50%	0.05 - 0.25%	0.02 - 0.10%

Option pool dilution calculator

Pre-money pool vs post-money pool

Typical equity grants by role and stage

Option pool FAQ