A seed-stage option pool averages 12 to 15% of fully diluted shares, not the 20% most term sheets open with. That gap shows up consistently in benchmarking data from Carta and AngelList across thousands of closed rounds, and it matters because every extra point in the pool comes out of your ownership, not the investor's.
If you're staring at a term sheet with a 20% pool line item and wondering whether that's standard, it isn't, not at seed. It's an opening position, and most founders don't push back on it because nobody tells them what the real number looks like.
The actual number, not the opening offer
Seed-stage pools land in the 10 to 15% range on a fully diluted basis, with benchmarking data pegging the average closer to 12 to 13% at the time of closing. Carta's own data on seed dilution shows the middle half of companies losing around 20% total ownership during the round, and the option pool is usually the single largest piece of that number, bigger than the price of the round itself.
Pre-seed pools tend to run smaller, 5 to 10%, because the team is often just the founders plus one or two early hires. By Series A the number climbs to 15 to 20% as companies hire across engineering, sales, and operations at once. Seed sits in the middle: enough to cover a lead engineer, a first salesperson, and a handful of advisors for 18 to 24 months.
Why investors still ask for 20% anyway
A bigger pool protects the investor's ownership, not yours. Because the pool usually gets created before the new money comes in, the dilution lands entirely on the founders' side of the cap table. The investor's stated ownership percentage stays exactly what they negotiated, regardless of whether the pool ends up at 10% or 20%.
That's the whole mechanism behind what's often called the option pool shuffle. Investors propose the pool as part of the pre-money valuation, so a 20% pool quietly increases the effective price of the round for you while looking neutral on paper.
The dilution math nobody shows you
Say you're raising $2M at an $8M pre-money valuation, a $10M post-money round. If the investor asks for a 15% pool built into that pre-money number, the pool is worth $1.5M of that $8M. Your effective pre-money valuation for your own shares just dropped to $6.5M, even though the term sheet still says $8M.
Push that pool down to 10% instead, and you keep an extra $400,000 of value on your side of the table, on the exact same round. That's the entire argument for building your own number instead of accepting whatever the term sheet opens with.
How to build your number instead of taking the benchmark
Benchmarks are a sanity check, not a plan. The founders who negotiate pool size down start with a hiring roadmap, not a percentage.
- List every role you expect to fill in the next 18 to 24 months, with a rough grant size for each: a lead engineer is usually 0.5 to 1.5%, a VP-level hire 1 to 2%, advisors 0.1 to 0.25% each.
- Add those grants up.
- Add a 10 to 20% buffer on top for hires you haven't scoped yet.
- Compare that number to the 10 to 15% benchmark. If your total lands meaningfully below what the investor is asking for, that gap is your negotiating room.
A pool that sits unused because you overestimated hiring doesn't just sit there quietly, it dilutes you for nothing until the next round absorbs it.
What to do this week
Before your next term sheet conversation, build the hiring roadmap above and put a number next to it. Walk into the negotiation with your own math instead of accepting the investor's opening number. A founder who shows up with a role-by-role hiring plan has more leverage to push a 20% ask down to 12 to 13% than one who just accepts the market average as fixed.
Frequently asked questions
What percentage option pool is normal for a seed round?
Most seed-stage option pools land between 10% and 15% of fully diluted shares, with benchmarking data putting the average closer to 12 to 13% at close.
Is a 20% option pool too high for seed?
Yes, for most seed rounds. 20% is closer to the Series A standard and is usually only justified at seed if the founding team plans to hire aggressively, 10 or more people, immediately after closing.
Who actually pays for the option pool?
Founders do, almost always. Because the pool is typically created before the investor's capital comes in, the dilution lands entirely on existing shareholders, which at seed usually means the founders.
Does the option pool come out of the investor's ownership too?
Not in a standard pre-money pool. The investor's ownership percentage is calculated after the pool is already created, so the dilution falls on the founders' side of the cap table, not the investor's.
How do I negotiate my option pool size down?
Show up with a hiring plan instead of accepting the benchmark. Map every role you'll fill in the next 18 months, size the grants, add a buffer, and use that total to argue for a smaller pool than the investor's opening ask.