option pool

An allocation of shares reserved to be granted as options via a company’s equity incentive plan (or stock option plan). You can also issue other derivatives from this reserved pool (e.g. warrants, RSAs, RSUs, etc).


A different way of distributing ownership-options are the right to buy shares based on a set of conditions. When an option is “exercised,” the option to buy stock is used and the result is issued shares. They’re typically used as part of a compensation package in the form of an incentive to employees, directors, advisors, and other people key to the company’s success.

Should a startup set aside equity?