Option Pool
An option pool is a collection of equity that is reserved for employees of the company.
What is an option pool?
An option pool is a portion of the company equity that is set aside to be awarded to employees of the company.
What is the average size of an option pool?
The average size of an option pool typically varies between 10-20% of the company. This varies based on the stage of the company and other factors.
Can an option pool be expanded?
Yes, but doing so will dilute the other equity holders. One must be careful to abide by all restrictions that would prevent dilution past a certain threshold.
What happens if the option pool is completely used up?
Once the option pool is completely utilized, there will not be any more options left to give out. The executives of the company could elect to increase the size of the option pool, but are not required to do so.
