Transparent method
The formula
Worked example
Example inputs
How to interpret the result
Whether an option pool expansion happens before or after a new investment round changes who actually absorbs the dilution from creating it, because a pre-money pool increase dilutes existing shareholders alone before the new investor's money comes in, while a post-money increase spreads that dilution across everyone, new investor included.
Before you rely on it
What to check
Confirm explicitly whether the pool expansion is structured as pre-money or post-money, since that timing decision determines who bears the dilution from creating the larger pool.
The common error
Where people go wrong with option pool dilution calculator
Assuming an option pool increase dilutes all shareholders, including the new investor, equally regardless of timing. A pre-money pool expansion, the more common structure, concentrates that dilution on existing shareholders specifically, before the new investor's ownership is calculated.
Sensitivity evidence
How existing fully diluted shares changes the additional pool shares needed
| Existing fully diluted shares | Additional pool shares needed | Post-increase fully diluted shares | Existing-holder dilution |
|---|---|---|---|
| 8,000,000 | 555,555.6 | 8,555,555.6 | 6.5% |
| 9,000,000 | 666,666.7 | 9,666,666.7 | 6.9% |
| 10,000,000worked example | 777,777.8 | 10,777,777.8 | 7.2% |
| 11,000,000 | 888,888.9 | 11,888,888.9 | 7.5% |
| 12,000,000 | 1,000,000 | 13,000,000 | 7.7% |
Every input, tested
Which input moves the additional pool shares needed most
| Input | Tested from | To | Additional pool shares needed at each end | Swing |
|---|---|---|---|---|
| Target ungranted pool percentage | 8.0% | 12.0% | 543,478.3 to 1,022,727.3 | 479,249 (62%) |
| Existing fully diluted shares | 9,000,000 | 11,000,000 | 666,666.7 to 888,888.9 | 222,222.2 (29%) |
| Current ungranted pool shares | 270,000 | 330,000 | 811,111.1 to 744,444.4 | 66,666.7 (8.6%) |
Two variables at once
Additional pool shares needed by existing fully diluted shares and current ungranted pool shares
| Existing fully diluted shares \ Current ungranted pool shares | 240,000 | 300,000 | 360,000 |
|---|---|---|---|
| 8,000,000 | 622,222.2 | 555,555.6 | 488,888.9 |
| 9,000,000 | 733,333.3 | 666,666.7 | 600,000 |
| 10,000,000 | 844,444.4 | 777,777.8 | 711,111.1 |
| 11,000,000 | 955,555.6 | 888,888.9 | 822,222.2 |
| 12,000,000 | 1,066,666.7 | 1,000,000 | 933,333.3 |
Step by step
The worked example, input by input
| Input | Value used |
|---|---|
| Existing fully diluted shares | 10,000,000 |
| Current ungranted pool shares | 300,000 |
| Target ungranted pool percentage | 10.0% |
| Additional pool shares needed | 777,777.8 |
| Post-increase fully diluted shares | 10,777,777.8 |
| Existing-holder dilution | 7.2% |
Where the inputs come from
Existing fully diluted shares include all issued shares, granted options and the ungranted pool. Current ungranted pool shares are the options reserved but not yet given to employees. Target ungranted pool percentage is what investors want available after the round, commonly 10% to 20% for a startup preparing to hire. The tool solves for how many new shares must be added so the ungranted pool reaches that percentage of the post-increase total.
When the result stops applying
The calculation is for the pool alone and does not include the investor's shares or other securities issued in the round, so final percentages differ. Pool size should reflect planned hires, not a round number. Unused options can be returned to the pool, and a pool that is too large is a hidden cost.
What to compare it with
See the round on the pre-money and post-money calculator, and the total dilution on the startup dilution page. The SAFE conversion and convertible note pages show how early money converts. Build a hiring plan and equity grid before agreeing to the pool size.
People also ask
Frequently asked questions
What is the option pool shuffle?
Creating or enlarging the pool before the round, so the dilution falls on existing shareholders and the investor's percentage is unaffected.
How big should an option pool be?
Commonly 10% to 20% after a priced round, sized to the equity grants you plan to make over the next 12 to 24 months.
Who bears the dilution from the pool?
Whoever owned shares before the pool increase. If it is included in the pre-money, existing holders bear it, and investors do not.