Stock Option Pool Refresh
Adding more shares to your reserved employee-equity pool — usually requested by investors during a new funding round to keep enough equity available for future hires.
Quick Answer
Who actually absorbs the dilution from an option pool refresh?
Existing shareholders — the refresh is typically calculated into the pre-money valuation, meaning founders and earlier investors absorb that dilution before the new investor's ownership percentage is even calculated.
- The refresh dilutes pre-money, not the new investor
- This is a heavily negotiated term in every priced round
- A larger refresh than needed dilutes founders unnecessarily
The Lovie Advantage
Lovie models exactly how a proposed pool refresh changes your ownership before you agree to the round's terms.
See how this connects to Restricted Stock Unit (RSU). For the formal definition, see the SBA's guide to startup costs.
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