What is Option Pool?
The reserved block of shares set aside to hire and reward your team with equity.
Option Pool: definition
To grant equity to your team, you first reserve shares for it - the option pool. Pools are typically sized as a percentage of the fully diluted cap table (often 10–20%) and are replenished over time as they are granted out. Because creating or expanding a pool issues new shares into the fully diluted count, it dilutes existing holders - and investors often require the pool to be set pre-money, concentrating that dilution on founders.
- Reserved shares for employee, advisor, and director equity
- Sized as a percentage of fully diluted shares (often 10–20%)
- Grants draw down the pool; forfeitures return shares to it
- Expanding the pool dilutes existing shareholders
How Fintra handles it
Fintra manages the option pool on the cap table: grants draw it down, forfeitures return to it, and the remaining unallocated balance is always visible. When you model a financing or a pool top-up, Fintra shows the dilution impact before you commit, and the fully diluted view reflects the pool automatically.
Worked example
Frequently asked questions
How big should an option pool be?
Commonly 10–20% of fully diluted shares, sized to cover the hires and refresh grants planned before the next financing. Too small and you run out mid-cycle; too large and you dilute unnecessarily. Fintra helps model the right size against your hiring plan.
What is the option pool shuffle?
It refers to investors requiring a new or expanded pool to be created pre-money, so the dilution lands on existing shareholders (founders) rather than the incoming investors. It effectively lowers the true pre-money valuation for founders - worth modeling carefully.
What happens to forfeited options?
When an employee leaves with unvested options, those shares generally return to the option pool and can be re-granted. Fintra returns forfeited shares to the pool automatically and updates the available balance.
Does Fintra track the option pool?
Yes. Fintra manages the pool on the cap table - drawing it down on grants, returning forfeitures, showing the unallocated balance, and modeling dilution when you top it up or raise.
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