How to Track Your Option Pool Before It Runs Out Mid-Round

Nobody tells you the option pool has a clock on it until you're two signed offer letters into a hiring push and the cap table tool flashes a number you don't recognize: 0.4 percent left. By then the fix isn't a spreadsheet problem. It's a board-approval problem, and it's happening at the worst possible time.

I set my pool at 12 percent going into seed, sized it against a real hiring plan, and still watched it run dry four months before my Series A closed. The math I'd done at the term sheet stage never accounted for how fast a pool actually depletes once hiring starts. Carta's benchmark data backs this up: the median startup burns through its seed-stage pool well before the next priced round, not because the original sizing was wrong, but because nobody tracked the burn.

The pool depletes faster than your hiring plan predicts

A hiring plan sizes the pool once, at the term sheet. Nothing about that plan accounts for the shares that get committed before they're actually granted: verbal offers out to candidates, backfills for a role you didn't plan to lose, and refresh grants for early employees who are up for a top-up before their next cliff.

Each of those pulls shares out of the same pool, and none of them show up if the only number you're watching is "total pool size minus shares granted so far." That number looks fine right up until it doesn't.

The three numbers to track every month

Treat the option pool like cash runway. It needs the same monthly discipline, and it breaks down into the same three inputs.

1. Granted. Every share issued against a signed offer, vested or not. This is the number most cap table dashboards show you by default, and it's the least useful one on its own.
2. Committed. Shares attached to a verbal offer, an offer letter out for signature, or a board-approved refresh grant not yet issued. This number lives in your head or a hiring pipeline doc, not in the cap table tool, which is exactly why it gets missed.
3. Available. Pool size minus granted minus committed. This is the real number, and it's usually 20 to 30 percent smaller than what the cap table software reports, because the software only tracks granted.

Divide available shares by your trailing three-month average grant rate and you get pool runway in months, the same way you'd calculate cash runway from burn rate.

What the shortfall actually looks like

Take a 12 percent pool on a 10 million fully diluted share count: 1.2 million shares. Six months after the seed closes, 700,000 are granted and 150,000 are committed to offers out for signature. Available is 350,000, not the 500,000 the cap table tool shows as "remaining."

If the last three months averaged 60,000 shares granted per month, that's 5.8 months of runway. If your next priced round, where a pool refresh normally gets negotiated, is 11 months out, you have a five-month gap where the pool runs dry and hiring either stops or forces an emergency top-up.

Why the between-round top-up is the expensive path

A pool refresh negotiated as part of a priced round gets shared, at least partially, across the new investor and the existing cap table. A top-up requested between rounds has no new money attached to it, so the entire dilution lands on current shareholders, primarily the founders, and it usually needs a fresh board resolution and sometimes major-investor sign-off to approve. Kruze Consulting's modeling on this is blunt: an out-of-cycle top-up is one of the costliest ways to fund a single hire, because you're paying full dilution for it with nothing coming back in exchange.

What to do when the runway math comes up short

1. Slow the hiring pace on the roles you have the most discretion over. Push a backfill or a nice-to-have hire a quarter, not the role that's blocking revenue.
2. Trim grant sizes for the remaining roles. A senior IC grant at the low end of the benchmark range instead of the high end buys real months of runway across several hires.
3. Flag the refresh to your board early, not when the pool hits zero. A refresh you raise three months ahead of running out gets discussed calmly at a regular board meeting. A refresh you raise the week an offer is stuck gets rushed, and rushed approvals rarely get you good terms.

The 30-day move

Add a three-line row to whatever spreadsheet or board deck you already update monthly: granted, committed, available. Divide available by your trailing three-month grant average to get runway in months. Set a trigger at six months of runway, the same way you'd flag low cash runway, and raise the refresh conversation with your board the moment you cross it, not the month you run out.

If you're still setting the pool size for the first time, start with how to size it correctly before you sign, then layer this tracker on top once the pool is live.

This tracker belongs in the same review as your broader cap table cleanup before your next round, since pool runway, prior grants, and vesting schedules all live on the same spreadsheet.

Frequently asked questions

How do I know if my option pool is running low?

Track granted, committed, and available shares monthly, then divide available by your trailing three-month grant rate. If that runway number drops under six months and your next priced round is further out than that, you have a gap to plan for now.

What happens if a startup runs out of option pool shares?

Hiring with equity has to pause until the board approves a pool increase. Approved between rounds, that increase dilutes existing shareholders with no new capital coming in, which is why it's one of the more expensive ways to fund a hire.

How often should I review option pool utilization?

Monthly, alongside your cash runway review. A pool can go from comfortable to critical in a single busy hiring quarter, and a quarterly or annual check catches it too late to negotiate a calm refresh.

Does a mid-cycle option pool refresh dilute founders more than a round-time refresh?

Usually yes. A refresh negotiated as part of a priced round can be shared with the incoming investor's capital and terms. A refresh requested between rounds has no new money attached, so the dilution falls on the existing cap table alone.

What's a healthy option pool runway to maintain?

Aim to keep available pool runway longer than the time to your next expected priced round, with at least a six-month buffer. If the gap closes to under six months, raise the refresh conversation with your board before an offer letter forces the timing.