Why option pool matters to a first-time founder
The pool sets how many future hires you can offer equity to without going back to shareholders for approval, and every share in it comes out of someone’s ownership. Investors often insist it is created before their money goes in, so founders absorb all of that dilution. Sized against a real hiring plan, it lets you compete for talent you cannot yet afford to pay in cash.
Examples of option pool
Before a round, an investor asks for a 10% pool. Your 80% becomes 72% if the pool is created from the existing shares, before their money goes in. The ungranted shares sit in the pool, not in your pocket and not in theirs. EMI, if you qualify, is one way to grant from a pool in the UK. It is not a different pool.
Common misunderstanding
People think the pool is free because nobody has been hired, or they think it dilutes only the founders and never the new investor. Who gets diluted depends on whether the pool is created before or after the round. That single timing choice is worth more than a long argument about the headline valuation. Unissued options are still a claim on the future cap table.
When to use it
Size it when you are about to hire or about to price a round, based on the hires you can actually name. A pool built for a fantasy team dilutes you for people you may never meet.