Option Pool
Option Pools for European Startups
An option pool is a block of shares set aside to grant to employees over time. Getting the size and timing right affects founder dilution, employee reward and how investors read your cap table.
Option pool sizing and refresh guides
Pool Size
Most European seed and Series A option pools sit between 10% and 15% of fully diluted shares. The right size depends on your hiring plan for the next 12 to 24 months, not on a round-number convention.
Creating a Pool
Creating an option pool means reserving a block of unissued shares, adopting a written plan, and getting board and often shareholder approval before any grants are made.
Increasing a Pool
A pool increase adds newly authorised shares to the existing reserve, usually timed around a funding round or when the pool is close to exhausted.
Pool Dilution
An option pool dilutes whoever holds shares before it is created, because it adds to the fully diluted share count without adding new money for those existing shares.
Pre-Money vs Post-Money Pool
A pre-money option pool is created before the investor's shares are issued, so founders absorb its dilution. A post-money pool is created after, so the investor shares the cost.
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