Create an Option Pool From a Hiring Plan?

Republished from a Nivi and Naval’s excellent blog, VentureHacks.com. The posting below came from this page.

To allocate the option pool from the hiring plan, use these current ranges for option grants in Silicon Valley:

These are rough ranges – not bell curves – for new hires once a company has raised its Series A. Option grants go down as the company gets closer to its Series B, starts making money, and otherwise reduces risk.

The top end of these ranges are for proven elite contributors. Most option grants are near the bottom of the ranges. Many factors affect option allocations including the quality of the existing team, the size of the opportunity, and the experience of the new hire.

If your company already has a CEO in place, you should be able to reduce the option pool to about 10% of the post-money. If the company needs to hire a new CEO soon, you should be able to reduce the option pool to about 15% of the post-money.

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