What is an option pool?
An option pool is a block of shares set aside to grant to employees, and sometimes advisors, as stock options. Investors usually set a target pool size in the term sheet alongside the pre-money valuation. When the pool is created or enlarged before a round, the dilution falls on existing holders; when it is enlarged after the round, all stockholders share it.
Why it matters to a revenue leader
The option pool is the equity budget for hiring. A sales plan that adds managers and senior sellers draws on it, and an undersized pool forces smaller grants or an early, dilutive top-up. A revenue leader building a hiring plan should know how many ungranted options remain and what grant size the company offers for each role.
Example
Fictitious numbersA company has 1.2 million ungranted options. The plan calls for a VP of Sales, 3 managers and 12 sellers over the next 18 months. At grants of 300,000, 60,000 and 20,000 options each, those hires need 720,000 options, leaving 480,000 for every other department.
"Does the option pool cover the sales hires in the plan, or will we need a top-up before the next round?"
Sources
- Option Pools Guide: How to Size Your Employee Option Pool checked 9 Oct 2026
- Share Dilution: What Causes Dilution & How to Prepare checked 9 Oct 2026