# Option pool

Concept · [Fundraising and equity](https://ecosystem.samcarlton.com/fundraising)

Also called: employee option pool, equity pool, stock option pool, employee pool, equity incentive plan, stock plan

A block of [shares](https://ecosystem.samcarlton.com/equity) a company sets aside to [grant](https://ecosystem.samcarlton.com/grant) to future [employees](https://ecosystem.samcarlton.com/contractor-vs-employee), [advisors](https://ecosystem.samcarlton.com/mentor) and contractors, usually as [stock options](https://ecosystem.samcarlton.com/stock-options).

**For example:** A company with 9 million [shares](https://ecosystem.samcarlton.com/equity) creates a pool of 1 million more for future hires. The pool is then 10 percent of the company, and every earlier owner's percentage shrinks to make room.

## Connects to (5)

- [Stock options](https://ecosystem.samcarlton.com/stock-options): The right to buy shares in the company later at a price that is set today.
- [Dilution](https://ecosystem.samcarlton.com/dilution): When the company creates new shares, each existing owner's percentage gets smaller, even though the number of shares they hold stays the…
- [Cap table](https://ecosystem.samcarlton.com/cap-table): Short for capitalization table.
- [Advisor shares](https://ecosystem.samcarlton.com/advisor-shares): A small amount of equity a startup gives an advisor in return for ongoing help, usually as stock options that vest over the period of the…
- [409A valuation](https://ecosystem.samcarlton.com/409a-valuation): An independent appraisal of what one share of a private company's common stock is worth.

> This glossary is plain-language orientation, not legal or financial advice. Before you decide on a company structure, a contract, taxes or a fundraising deal, talk with a lawyer or an accountant.

Map view: https://ecosystem.samcarlton.com/option-pool