Option pools are one of the most important items a founder needs to project and model, but many founders don’t understand the importance of this exercise.Option decrease the founder’s ownership - every extra point of option pool comes at the cost of existing shareholders, most of which will be the founder(s)!And venture capitalists will ask founders to eat that dilution before they invest - in effect, reducing the pre-money valuation they offering at a financing round.So understanding how many options will be needed prior to a fundraise is important.The right way to project a pool is to build out a robust hiring plan as part of the overall financial planning exercise. Once you’ve built out your overall hiring plan, you can use our template above to right-size the employee stock option pool. We’ve written an entire article on how to model an option pool here. So download that free template above and protect your ownership!!