Big News: FounderDating is joining OneVest to build the largest community for entrepreneurs. Details here
Latest Notifications
You have no recent recommendations.
Name
Title
 
MiniBio
FOLLOW
Title
 Followers
FOLLOW TOPIC

Question goes here

1,300 Followers

  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur

How much should you set aside for a stock option pool at a Series A?

We already allocated a fair amount at the beginning of the business when we incorporated. The amount was 15%. Now investors are asking for an additional 7% allocation to the stock option plan. By how much do you normally increase the pool at a Series A round of financing? Many thanks.

5 Replies

Hamid Farzaneh
0
0
Hamid Farzaneh Entrepreneur
CEO and Co-Founder at Alea Labs, Inc.
My experience is that VC's typically want a 20-25% option pool size pre series A.
Dane H. Madsen
0
0
Dane H. Madsen Entrepreneur • Advisor
CEO, SVP Business Development | Domestic & International, Product Marketing | Open to new connections
Agreed with the 20% but the investors will want that done before their money is in (there is some room to negotiate, but that depends on how strong their interest is in the investment). They do not want to take dilution of their investment, so it will be higher than 20% to start so to achieve 20% after their money is in.
Donavon Urfalian
0
0
Donavon Urfalian Entrepreneur
A.I. Engineer / Entrepreneur / Founder & CEO @ Umazed / Kodo Startups
If you are the CEO, and have the C level folks, you can reduce the option to 10-15% to keep more of your equity/preferred stalks.
Selvan Rajan
0
0
Selvan Rajan Entrepreneur • Advisor
Mobile & middle-tier architect
Don't go with investors asking. They will stand to gain as it dilutes yours.
Use a simple calculation:
1. How long is it going to be the until the next round? Typically it is 12 months to 18 months
2. How many employees are you planning to hire? Now for each position, how much are you planning to allocate? This is what you need.
If you come up with theright number with the backup data, you should be ok. You can always increase itif you need more. What if you need only 10%, and in this case, the post-money per-share value will have the unnecessary 10% unused shares in it. Without the right number that you can come up, you may be forced to go with what the investors are asking for. So, do your math.
Tom DiClemente
0
0
Tom DiClemente Advisor
Management Consulting | Interim CEO/COO | Coach
We cannot comment on the increase since we do not know how much you have already given, the amount in the hands of founders, or the composition of the team and what other team members may have to be recruited.

But generally, without knowing any of the above, we would want to see 20% in a Series A funding at our post-money valuation.
Join FounderDating to participate in the discussion
Nothing gets posted to LinkedIn and your information will not be shared.

Just a few more details please.

DO: Start a discussion, share a resource, or ask a question related to entrepreneurship.
DON'T: Post about prohibited topics such as recruiting, cofounder wanted, check out my product
or feedback on the FD site (you can send this to us directly info@founderdating.com).
See the Community Code of Conduct for more details.

Title

Give your question or discussion topic a great title, make it catchy and succinct.

Details

Make sure what you're about to say is specific and relevant - you'll get better responses.

Topics

Tag your discussion so you get more relevant responses.

Question goes here

1,300 Followers

  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
Know someone who should answer this question? Enter their email below
Stay current and follow these discussion topics?