Option pool (ESOP)
Reserved share allocation for future employee, director, and advisor equity grants.
| Canada (ITA) | Stock option plan, subject to s. 7 ITA |
|---|---|
| US (IRC) | Equity incentive plan, ISO (§ 422) or NSO (§ 83) |
| UK (HMRC) | EMI plan / unapproved options |
How pools get sized
Standard practice for a Series A is to ensure a 10-15% available pool after the round. This typically requires expanding the pool pre-round — which dilutes existing shareholders (mostly founders) rather than diluting the new investors. This 'pre-money pool top-up' is one of the most negotiated items on a term sheet.
- Series A: 10-15% available pool (i.e., unallocated post-round)
- Series B: 8-12%, depending on growth and headcount plan
- Series C+: 5-10%, with grants more targeted to senior leadership
Plan administration
The option pool sits in a formal stock option plan or equity incentive plan, adopted by board resolution and approved by shareholders. The plan governs grant types (ISOs, NSOs, RSUs, restricted stock), vesting schedules, post-termination exercise periods, and grant size approval thresholds. The board typically delegates routine grants to a compensation committee.
Octelligence tracks the option pool size, outstanding grants, available capacity, and dilution effect at every point. New grants update the cap table and notify the grantee for acceptance.
View cap tablePro-rata, ROFR, drag-along, MFN, registration rights. Recorded against the share, surfaced when relevant.