An option pool is a percentage of a company's outstanding shares that are set aside for employees. The size of the option pool is typically determined at the time of a company's IPO, and is usually between 10-20% of the total number of shares outstanding.
How much should I set aside for option pool?
There is no set answer to this question, as the amount you set aside for your option pool will depend on a number of factors, including the size of your company, the stage of your company, and the valuation of your company. However, as a general rule of thumb, you should set aside at least 10% of your total equity for your option pool. This will give you enough room to attract and retain top talent, without diluting your own equity too much. How much is a stock option pool? A stock option pool is a specified number of shares of a company's stock that are set aside for the purpose of granting stock options to employees. The size of the stock option pool is typically determined as a percentage of the total number of shares of the company's stock. For example, if a company has 1,000 shares of stock outstanding and sets aside 10% of those shares for the stock option pool, that would equate to 100 shares.
How large should an option pool be?
There is no one-size-fits-all answer to this question, as the size of an option pool will depend on a number of factors, including the stage of the company, the amount of funding raised, the number of employees, and the anticipated future needs of the company. However, as a general rule of thumb, it is typically recommended that a company set aside 10-15% of its total equity for an option pool.
Do exercised options return to the pool? According to the website Investopedia, "Typically, unvested stock options expire when an employee is terminated from a company. Vested stock options, on the other hand, can be exercised at any time." Therefore, if an employee is terminated, their unvested stock options will expire and will not return to the pool. However, if an employee leaves voluntarily, they may be able to keep their vested stock options.
How much equity should founders keep? The answer to this question depends on a number of factors, including the stage of the company, the amount of funding raised, the valuation of the company, and the founders' goals.
In general, it is typically recommended that founders keep 10-20% of the company's equity. However, there may be circumstances where it makes sense to keep more or less equity. For example, if the company is pre-revenue, the founders may want to keep a larger percentage of the company in order to maintain control. Or, if the company is seeking to raise a large amount of funding, the founders may want to give up a larger percentage of equity in order to attract investors.
Ultimately, the decision of how much equity to keep should be made based on the specific circumstances of the company and the founders' goals.