Option Pool
Definition
A reserve of authorised but unissued shares set aside for issuance under the equity compensation plan. The option pool is expressed as a number of shares or as a percentage of the fully diluted share count. The ungranted portion of the option pool must be included in the fully diluted share count because it represents authorised future dilution that will reduce existing holders' ownership percentages when grants are made.
Common Misapplication
The most common misapplication is excluding the ungranted portion of the option pool from the fully diluted share count when presenting ownership percentages to investors. Presenting ownership percentages calculated without the ungranted pool reserve overstates the ownership percentage of all current holders.
FFI Standard Reference
This term is defined and applied in Book 3, Section 3.3: The Equity Compensation Standard.
Related Terms
Citable URL
This term may be cited using the following permanent URL.
Full citation format: Founder Financial Infrastructure Standard, Beta v0.5, Glossary: Option Pool. https://ffistandard.org/glossary/option-pool/. 2026.