ESOP Calculator for Indian Founders and Investors

ESOP Pool Size Calculator

Funding Stage

Latest funding round

ESOP Pool size %

Company Valuation

Seed

Series A

Series B

Funding Amount

Pre-money valuation

Post Money Valuation

Capitalisation Table

While incorporation

Seed

Series A

Series B

Founders holding

100%

ESOP pool size

Investors holding

Frequently Asked Questions

How does ESOP pool size affect your company’s ownership, valuation and share price?

Establishing an ESOP pool results in a reduction of the percentage of ownership for all current shareholders.
Creating a 10,000-share option pool in a company with 100,000 shares reduces your ownership from 100% to about 90.91% (100,000 out of 110,000 total shares).

A larger pre-money option pool means lower post-money ownership for founders. If an existing option pool is deemed inadequate, investors might request its expansion to cover future hiring needs until the next funding round.

What is the standard average of ESOP pool size ?

The average size of an Employee Stock Option Pool (ESOP) typically ranges between 10% to 20% of the company. This range can vary depending on several factors, including the stage of the company, its hiring plans, and negotiations with investors and shareholders.

What is the standard ESOP pool size based on funding series?

Seed Stage:10-15 %
Series A and B:7-10%
Seed C,D&E stages - Max limit is 7.5%

What is the maximum limit of employee option pool size?

It is generally observed that the typical size for an option pool can be up to 20% of the stock of the company.

When should a company implement an ESOP?

Seed Stage: Ideal for attracting early talent when cash is limited. ESOPs compensate for lower salaries with equity potential.
Series A/B Stage: Useful for retaining key employees and aligning their interests with the company's growth, as financial resources improve.
Later Stages (Series C and beyond): As the company stabilizes and grows, ESOPs shift towards rewarding long-term performance and retaining top talent in a more competitive environment.

How come ESOP is useful for seed funding companies?

By offering stock options, startups can incentivize employees with the potential for future financial gains as the company grows, aligning employee interests with the company's success. This approach is particularly effective in the early stages when preserving cash flow is crucial for the company's development and growth.

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