stock-options, sharesIf someone gonna create a next high tech startups like google or Facebook,
what is the recommended percentage for option pool for early employees?
Also what is the recommended percent should be allocated from that option pool for each early employee?
I’d usually recommend not putting in an option pool until a later round, with advise from a lawyer and with negotiation from your investors.
At an initial stage it is a technicality that you can put to one side and focus more on your MVP, raising investment, making your first sale etc.
after that your lawyer should be able to guide you through a process of creating an option pool which is tax efficient and which criteria employees need to meet in order to be included in it. Different countries have different employee pool schemes (see EMI Scheme in the UK)
If you wait until investment then you can negotiate with your investors over the size of the option pool and in what way it dilutes.
So, for example after our 2nd round of investment when we had our initial team together we put in place a 10% option pool (created after the completion of the round, as part of the cost of the round negotiated with the lawyer) under the EMI scheme. Different investors may have different preferences over how you reward your employees and the size of the pool. It can become a negotiate tool later on. So, personally I’d put it out of my mind until it is necessary
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