Option pool
In accounting, option pool means shares the board reserves under a stockholder-approved equity plan for future grants of options and other awards. Granted options and the unissued remainder both count in fully diluted shares.
Authority: 26 U.S.C. §422(b)(1) (opens in a new tab). Sources
The lessons that teach this
From the free founder back-office course, taught on one company's books, with exercises to work it yourself.
- Cap tableThe cap table explained › Fully diluted versus outstandingOutstanding counts what exists; fully diluted counts what could. The same Northwind table, both ways.4 min
- Cap tableSAFE conversion and dilution, worked end to end › The option pool shuffleWhy a 10% pool sized post-money but created pre-money turns a $8,000,000 pre-money into $7,000,000.5 min
- Cap tableEmployee stock options: ISOs, NSOs and RSUsISOs, NSOs and RSUs: how each is taxed, Northwind's first grants to Priya Shah and Marcus Lee, and the expense they put on the P&L.10 min
For founders
The same idea written for a founder: what it costs a startup that ignores it, and what to do in a real month.
What it is not called
Each of these means something else. Use one here and an accountant reading the product notices.
- options outstanding (only the granted part)
- treasury stock
Nearby in the catalog
No component names this concept outright. These sit in the same part of the system.
Also in Equity & financing
Defined in Lexicon. This page is generated from that document, so the two can't disagree.