ESOP

Also called Employee Stock Option Pool and Option Pool

A block of shares set aside to grant to employees as stock options, so the people you hire early can own a piece of what they build. Usually 10 to 15 percent of the company at the seed stage.

Why it matters

The ESOP is how you compete for talent when you cannot match big-company salaries. How large it is, and when it is created, affects both hiring and your own dilution, so it is a real negotiating point in a round.

Related terms

Vesting Dilution Cap Table
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