First things first; This is the size of the Option Pool as a percentage of the POST-MONEY Valuation and where ALL of it comes from the founder's equity.
This is the least founder-friendly way to present this, but it is also the point at which most early stage investors will start the negotiations. Read the 'More Info' section for more commentary on this.
So what is the Option Pool? Simply explained, the Option Pool is the percentage of your company that you are setting aside for future employees, advisors, consultants, and the like.
The expectation from traditional venture firms is that this will equal 15%-25% of the company after they make their investment. The Option Pool is one of the most complex and, from the entrepreneur's perspective, confusing terms in an equity financing scenario. Click the link below for more information on norms and other resources that are helpful for thinking through the impact and implications of the Option Pool.