# Option Pool

*Startups & Venture Capital — Finicade finance glossary*

An option pool is shares reserved for future employee equity grants, typically 10–20% of the company. Where it's created in the cap table is a real negotiation: investors normally require it to come out of the pre-money valuation, so existing shareholders bear the dilution alone. That 'option pool shuffle' can quietly reduce an effective valuation by more than a price negotiation would have.

**Also known as:** ESOP pool, employee option pool, option pool shuffle

**Related terms:** [Employee Stock Options](https://finicade.com/glossary/employee-stock-options), [Cap Table](https://finicade.com/glossary/cap-table), [Dilution](https://finicade.com/glossary/dilution), [Pre-Money vs Post-Money Valuation](https://finicade.com/glossary/pre-money-vs-post-money-valuation), [Vesting](https://finicade.com/glossary/vesting)

Source: https://finicade.com/glossary/option-pool