Size Hirevik Talent's option pool for the next 18 months from its hiring plan. What pool should the Series A term sheet specify, and who pays for it?

The plan supports a 7% pool: 5.6% of named hires plus a 25% buffer. The term sheet's 10% is 3 points more, and because the pool is created in the pre-money, those 3 points come entirely out of the founders: 70% of the company instead of 73%, Rs 3 crore of value at the round price, for hires nobody has planned. Counter with 7% and the plan behind it.

When a family plans a wedding budget, the sensible way is to list the hall, the caterer and the guests and add a margin for what gets forgotten, not to start from what the neighbours spent. An option pool is the same list: each planned hire at its market grant, summed, plus a buffer, and nothing else. A CTO at 1.5%, two VPs at 0.75% each, eight senior engineers at 0.2% each and twenty staff at 0.05% each come to 5.6%. A 25% buffer, 1.4 points, covers the hire you have not thought of and the candidate who negotiates harder, and lands the pool at 7.0%.

Because the pool is created before the round, it is carved out of the existing holders, which here means the founders. The investor puts in Rs 20 crore for 20% whatever the pool is. With a 10% pool the founders keep 70%; with a 7% pool they keep 73%, so the extra 3 points of pool are 3 points of founder ownership, Rs 3 crore at the round's price. Another way to see it: the headline pre-money is Rs 80 crore, but the effective pre-money for the founders is Rs 80 crore less the pool's value, Rs 70 crore with a 10% pool and Rs 73 crore with 7%. The investor likes a big pool because unused options at the next round mean fewer new ones, and that dilution would otherwise fall on the investor too.

Bring the list, not an opinion. A founder who says 7% is a number; a founder who shows 31 hires, their grants and a 25% buffer has an argument the investor has to answer line by line. The usual landing points: agree the 7%, or agree 10% but create the part above 7% after the round, so the investor shares that dilution, or agree 10% and lift the pre-money to Rs 83 crore so the founders are no worse off. If the pool were created after the round, 10% would be split between founders and investor in proportion: founders 72%, investor 18%, which is exactly why investors ask for it before.

Say the limitation. Grants here are quoted as a share of the company, but each hire's expected grant also depends on the share price at the time and on how much ownership senior people at this stage normally get, both of which move; and some leavers will forfeit unvested options back into the pool, which is one reason the buffer need not be larger than 25%. The judgement is that a pool is a budget, and a budget that nobody can trace to a hire is a transfer from founders to investors with a different name.