Option Pool Calculator (option pool shuffle)

How it is calculated

Post-money = Pre-money + Round size. Investor % = Round size ÷ Post-money.

Pool in the pre-money (the shuffle, typical in VC term sheets): the new investor and the target pool are both fixed percentages of the post-round company, so existing holders (excluding the unissued pool) keep 1 − investor % − target pool %. Post-round shares = existing non-pool shares ÷ that fraction. Price per share = Post-money ÷ post-round shares. New pool shares = target pool % × post-round shares − existing unissued pool. Effective pre-money = Price × existing non-pool shares.

Pool added after the round: Price = Pre-money ÷ pre-round fully diluted shares. Investors buy Round size ÷ Price shares. The pool is then topped up so the unissued pool equals the target % of the final total: increase = (target % × shares after investment − existing pool) ÷ (1 − target %). This dilutes the new investors too.

Cost of the shuffle = existing holders' % with the pool added after − their % with the pool in the pre-money. In dollars, it equals the value of the new pool at the round price, which is the gap between headline and effective pre-money.

Assumptions: one priced round, no SAFEs or notes converting (use the SAFE or convertible note calculator for those), the existing unissued pool counts toward the target, and fractional shares are not rounded.

Worked example

10,000,000 shares, no existing pool, $8M pre-money, $2M round, 10% post-money pool. Pool in the pre-money: investors 20%, pool 10%, founders 70%; 14,285,714 post-round shares; price $0.70; 1,428,571 new option shares; effective pre-money $7.0M. Pool added after: price $0.80, founders 72%, investors 18%, pool 10%. The shuffle costs founders 2 percentage points, or $1.0M of pre-money.

What is the option pool shuffle?

It is the practice of requiring the new or enlarged employee option pool to be created before the investment and counted in the pre-money valuation. The dilution from the new pool then falls only on existing shareholders, not on the new investor, which lowers the effective pre-money.

How big should a startup option pool be?

Pools of roughly 10–20% of the post-money company are often cited for seed and Series A rounds, but the defensible size is the one that covers your actual hiring plan until the next round. A bottom-up hiring plan is the best argument for a smaller pool.

Does the existing option pool count toward the target?

Usually yes: term sheets typically say the unissued and available pool must equal a percentage of the post-money fully diluted capitalization, so only the shortfall is newly created. This calculator follows that convention. Issued, outstanding options are part of the existing shares, not of the unissued pool.

How can founders reduce the cost of the shuffle?

Negotiate a pool sized to a concrete hiring plan, ask for the pool to be partly or wholly created post-money, or ask for a higher headline pre-money that offsets the pool. Compare offers on effective pre-money, not headline pre-money.