Founder answers
How big should your ESOP pool be before a seed round?
Short answer
A seed-stage ESOP pool in India is commonly around 8–12% of the fully-diluted cap table. Investors usually ask you to create or top it up pre-money, which dilutes the founders rather than the incoming investor.
The number
There’s no law here, but 8–12% is a common seed-stage range, sized to cover the key early hires you’ll grant options to before the next round.
The option-pool shuffle
Investors typically require the pool to be created or increased before they invest (“pre-money”). Because it’s created pre-money, the dilution falls on existing holders — the founders — not the new investor. Model it before the negotiation.
Common questions
Who does the ESOP pool dilute?
When created pre-money (the usual ask), the pool dilutes existing holders — the founders — not the incoming investor.
Can the pool be too big?
Yes — an oversized pool dilutes founders unnecessarily. Size it to the hires you’ll actually grant before the next round.
Stop reading, start building — the lesson lets you model this with your own numbers.
Open the lesson →