Option Pool Calculator
See what the option pool shuffle really costs: founder ownership before vs after, and your effective pre-money valuation.
Pool before vs after the round
Pool created before the round
70.0%
founder ownership: the pool comes out of your side only.
Pool created after the round
72.0%
founder ownership: the pool dilutes everyone, including the investor.
Creating the pool before the round costs you 2.0% more ownership.
Effective pre-money valuation
$7,000,000
A pool created before the round lowers the pre-money you actually receive from $8,000,000 to $7,000,000, a difference of $1,000,000. Investors price a big pre-round pool as if they invested at this lower valuation.
The pool is sized as a percentage of the post-round, fully diluted ownership. When it is created after the round, everyone is diluted; when before, only existing holders pay for it.
Educational estimate, not legal or financial advice.
How it works
Test your option pool in 3 steps
Enter the pre-money valuation and how much you are raising.
Enter the option pool size the investor wants, as a percentage of the company after the round.
Compare your ownership when the pool is created before vs after the round, and check your effective pre-money valuation.
Worked example
A 10% pool on an $8M pre-money
Inputs
- Pre-money
- $8,000,000
- Raise
- $2,000,000
- Target pool
- 10%
Result
- Founders keep (pool before)
- 70%
- Founders keep (pool after)
- 72%
- Effective pre-money
- $7,000,000
A pre-money pool turns an $8M offer into a $7M one.
How we got there
You raise $2,000,000 at an $8,000,000 pre-money valuation, and the investor asks for a 10% option pool. The post-money valuation is $10,000,000. If the pool is created before the round, founders keep 70%. If it is created after the round, founders keep 72%. The pool is worth $1,000,000, so your effective pre-money valuation is $7,000,000, not $8,000,000.
Reading your result
What the pool really costs you
Good sign
A pool sized to your real hiring plan for the next 18 to 24 months.
Red flag
A 15% to 20% pool with no hiring plan behind it.
When investors ask for the pool to be created before the round, the whole cost falls on existing shareholders. Your headline valuation stays the same, but the value you actually receive is lower.
Size the pool to your real hiring plan for the next 18 to 24 months. A pool bigger than you need is a hidden cut to your valuation.
FAQ
Option pool questions
Shares set aside for future employees, advisors and key hires, so you can offer equity without negotiating a new round each time.
Many seed rounds use 10% to 15%, but the right size depends on who you plan to hire before your next round.
When the pool is created inside the pre-money valuation, so its cost comes only out of the founders' share and the effective valuation drops.
Yes. Bring a hiring plan that shows the options you actually need. A smaller pool means a higher effective valuation for you.
The headline pre-money valuation minus the value of the new option pool created before the round.