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Employee Option Pool

Shares reserved for issuance to employees as stock options.

Reviewed by Christian Espinosa, Founder, Blue Goat CyberLast reviewed May 5, 2026

Definition

An option pool is a set-aside of common stock reserved for grants to employees, advisors, and directors as part of compensation. Pools are typically created or topped-up before each priced round, usually pre-money - meaning founders bear the dilution.

What this means in practice

Typical seed/Series A pools are 10–15% post-financing. MedTech companies with longer development timelines often need larger pools to retain talent through clinical and regulatory milestones.

Common pitfalls

•Letting an investor demand a 20% pool top-up pre-money without negotiating it down based on actual hiring plan.

Primary references

3 sources

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On this term

Category: Investment & Finance
Sources: 3
Updated: 5/5/2026

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Learn in 60 seconds

Shares reserved for issuance to employees as stock options.

·Typical seed/Series A pools are 10–15% post-financing.
·MedTech companies with longer development timelines often need larger pools to retain talent through clinical and regulatory milestones.
·Pools are typically created or topped-up before each priced round, usually pre-money - meaning founders bear the dilution.

Remember this

Watch out: Letting an investor demand a 20% pool top-up pre-money without negotiating it down based on actual hiring plan.

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