Option pool (ESOP) calculator
ESOP stands for employee share option plan, also called an employee stock option plan.
An ESOP sets aside shares for staff, usually as an option pool. Investors often ask for the pool to be topped up before they invest, inside the pre-money.
The formula
Option pool = pool wanted × shares after the round − pool you have
Worked example: 142,857 new pool shares
The example uses the guide's seed round, £200,000 for 20%, with a matching cap table, exit, fund and market.
- A 10% pool after the round needs 142,857 new shares
- At £0.70 a share, that is £100,000 of the pre-money
Work out your option pool
Until you type a figure, the results show an example business. Fill in only what you know: from then on every result uses your figures alone, and nothing you type leaves your browser.
Option pool for the example
Example142,857
new pool shares
- A 10% pool after the round needs 142,857 new shares
- At £0.70 a share, that is £100,000 of the pre-money
Formula: Pool wanted × shares after the round − pool you have.
- Effective pre-money
- £700,000
- what existing shareholders really get
Everything your numbers show
For the example business: 27 of 27. Type your own figures to replace them. Select one for its page.
- Valuation£1,000,000post-money
- Pre-money valuation£800,000
- Post-money valuation£1,000,000
- Equity20.0%Equity sold
- Dilution70.0%kept by existing shareholders, down from 100.0%
- Option pool142,857new pool shares
- Fully diluted60.0%Fully diluted ownership
- SAFESimple agreement for future equity89,286shares
- Loan note96,429shares
- Pro rata rights£200,000Pro rata amount
- Liquidation preference£1,000,000to the investor
- Vesting180,000after 18 months
- Cliff120,000at month 12
- SEISSeed Enterprise Investment Scheme£10,000
- EISEnterprise Investment Scheme£6,000
- VCTVenture capital trust£4,000
- TAMTotal addressable market£240,000,000a year
- SAMServiceable available market£60,000,000a year
- SOMServiceable obtainable market£3,000,000a year
- Down roundDown round
- Up roundDown round
- Flat roundDown round
- MOICMultiple on invested capital2.80x
- IRRInternal rate of return22.9%a year
- TVPITotal value to paid-in capital1.50x
- DPIDistributions to paid-in capital0.40x
- Dry powder£24,000,000
How to read your result
The effective pre-money is what existing shareholders really get once the pool is paid for. Size the pool to your hiring plan rather than a round number.
Watch out for
The pool size and the scheme are separate decisions. In the UK, EMI (Enterprise Management Incentives) options can be tax-advantaged for employees.
Last checked . Estimates only, not financial, tax or legal advice: check your accounts and documents, and take advice before you act. More terms in the startup glossary.