What is an option pool?

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What is an option pool?

• Options give the right to employees to buy stocks in the future at some pre-determined share price.

• Granted mostly to employees but may include consultants, advisors and board members.

• Option pool is the number of shares reserved for current options granted and expected future options.

• Options are used to motivate employees especially when start-up companies cannot compete with talent from bigger corporates. E.g. Ali Baba vs Microsoft

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