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Option Pool Calculator

The Option Pool Calculator estimates the pre-money option-pool increase needed to reach a target ungranted pool percentage after a financing. It accounts for the fact that both the existing pool and newly added pool shares are diluted when the new investor receives a post-money stake. This is particularly useful when a term sheet requires the company to create or refresh an employee pool before closing. A pre-money top-up generally dilutes existing holders rather than the new investor, so the timing and target definition can materially affect founder ownership.

Inputs

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Result
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Pre-money pool top-up required
New pool shares as % of pre-round base—
Existing holders after pool and financing—
Target pool after financing—

1. Enter the current ungranted pool
Use the pool available for future grants as a percentage of the current fully diluted pre-round capitalization.

2. Enter the target pool
Use the required ungranted pool percentage immediately after the financing.

3. Enter investor ownership
Use the new investor’s expected post-money percentage before considering any special allocations.

4. Review the top-up
The main result shows the post-financing dilution attributable to the newly created pool shares.

5. Confirm with a share-based cap table
Translate percentages into actual shares using the financing capitalization definition.

Required pool before financing = Target post-money pool ÷ (1 − Investor ownership)New pool shares ÷ Current pre-round shares = (Required pre-financing pool − Current pool) ÷ (1 − Required pre-financing pool)

Where:

  • Current pool — ungranted reserve before the top-up
  • Target pool — desired ungranted reserve after financing
  • Investor ownership — new investor percentage after financing
  • New pool shares — additional shares reserved before financing

Assumptions: The option-pool top-up occurs pre-money, all percentages are fully diluted, and the investor ownership percentage is applied after the pool increase.

What the result means

The top-up is the incremental reserve needed, not the entire target pool.

Negotiated definitions may include granted options, refresh grants, or securities converting in the round, which changes the exact share count.

Given: Current pool = 5%, target post-money pool = 12%, investor ownership = 20%.

Calculation: Required pool before financing = 12% ÷ 80% = 15%. New pool shares relative to the current base = (15% − 5%) ÷ 85% = 11.7647%. After financing, those new shares represent about 8.42% of the post-money company.

Result: A pre-money top-up equal to about 11.76% of the current share base is required.

Why is the required top-up larger than target minus current pool?

Because issuing new pool shares enlarges the denominator, and the financing then dilutes the pool again.

Who is diluted by a pre-money pool increase?

Existing holders generally bear the dilution because the pool is created before the investor’s ownership is calculated.

Should granted options count as available pool?

No. A target for future hiring usually refers to ungranted reserve, although the term sheet’s definition controls.

What if the current pool already exceeds the target?

The calculator returns no required top-up. Companies normally do not cancel excess reserve solely for this calculation.

How do I convert the percentage into shares?

Apply the share-base ratio to the current fully diluted pre-round share count, then verify the result in a complete cap table.