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Option Pool Shuffle

Option Pool Shuffle

The option pool - the amount of options to be allocated to future employees - lowers your effective valuation.

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Q25110593
Introduction

E.g. your effective pre-money valuation is not $8M but $6M, if 25% of the $8M is allocated to new options. The option pool only affects common stock. VH recommends using a hiring plan to determine what the appropriate size of an option pool should be.

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Further Resources

Title
Author
Link
Type
Date

The Option Pool Shuffle

Babak Nivi

http://venturehacks.com/articles/option-pool-shuffle

Valuation and Option Pool

Fred Wilson

http://avc.com/2009/11/valuation-and-option-pool/

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