Option Pool
Shares reserved for future employee equity grants, usually 10–20% of the cap table.
An option pool is a block of shares set aside for hiring. Investors require one so the company can recruit without returning to shareholders for approval each time.
The timing decides who pays for it. A pool created pre-money dilutes only the existing shareholders — the founders. Created post-money, the dilution is shared with the new investor. Investors default to pre-money, and this is negotiable.
Pool size should be driven by the hiring plan for the next 18 months, not by a round number. An oversized pool is dilution taken today for hires that may never happen.