Option Pool Dilution
How much of the company an option pool costs, and what it does to each existing holder. The pool is usually carved out before a round, so the founders pay for it, not the new investor.
| Pool % | Pool shares (M) | Founder % |
|---|---|---|
| 5% | 0.53 | 76.0% |
| 10% | 1.11 | 72.0% |
| 12% | 1.36 | 70.4% |
| 15% | 1.76 | 68.0% |
| 20% | 2.50 | 64.0% |
P = q/(1 − q)·existing · q is the post-money pool.
p = pre-money/(existing + P) · The pool sits inside the pre-money.
A clear path from inputs to results.
How much of the company an option pool costs, and what it does to each existing holder. The pool is usually carved out before a round, so the founders pay for it, not the new investor.
How to use
- Set existing shares (m).
- Set pool (% post-money).
- Set new money ($m).
- Set pre-money ($m).
- Read the headline metrics, then check the table for the detail.
The formula
Reference: The pool is carved out before the round, per the NVCA model legal documents.
Worked example
At the default inputs
- Existing shares (M): 10; Pool (% post-money): 12; New money ($M): 10; Pre-money ($M): 40
- 1
Pool shares: 1.36M · Price per share: $3.52 · Founder ownership: 70.4% · Dilution from the pool: 9.6%
Pool shares: 1.36M · Price per share: $3.52 · Founder ownership: 70.4%
Interpreting the result
A 12.0% pool costs 1.36M shares before the round even starts.
Assumptions & limitations
- One round, one new investor.
- The pool is unissued.
Frequently asked questions
Who pays for the pool?
Existing holders, because it sits inside the pre-money.
Does a bigger pool always hurt?
It lowers the price per share but funds hiring; the trade is dilution now for a stronger team.
Methodology last reviewed 2026-10-22. Results are informational and not financial or engineering advice — see our disclaimer.