Business Pitch Dictionary by pitch.dog
Cap table, ownership & dilution · Core

Option pool

Also called: employee option pool, ESOP pool

ELI5

Shares saved for future team equity grants.

Used in conversation

“The option pool increase is included before the financing.”

Definition

A reserve of equity set aside for employee, director or advisor grants.

Here “Option pool” means: A reserve of equity set aside for employee, director or advisor grants.

Pitch context

You will see “Option pool” in fundraising decks, data rooms, term sheets and investor conversations when the discussion reaches cap table, ownership & dilution.

Why it matters: In cap table, ownership & dilution, a loose definition can change rights, obligations, approval, disclosure or enforceability.

Caution

Meaning, enforceability and required process vary by jurisdiction and agreement; this definition is not legal advice.

Connected terms

Sources & evidence · 5

Direct term-level sources and supporting source families.