ESOP Pool Sizing & Option Pool Shuffle Dilution Calculator
What is the true effective pre-money valuation and founder equity penalty caused by creating a pre-money option pool?
Financial Inputs
Unallocated option pool size required by the investor term sheet before closing.
True Effective Pre-Money Valuation
Under a pre-money option pool structure, the stated ₹12 Cr valuation is effectively reduced to ₹10.8 Cr (a hidden discount of ₹1,20,00,000).
Hidden Valuation Discount to Founders
1,20,00,000
Founder Extra Dilution Penalty
0%
Key Financial Takeaways
- Under a pre-money option pool structure, the stated ₹12 Cr valuation is effectively reduced to ₹10.8 Cr (a hidden discount of ₹1,20,00,000).
- In a Pre-Money Pool, founders end up with 72% equity versus 72% in a Post-Money shared pool.
- Founders absorb an extra 0% dilution penalty (worth ₹0 at current round pricing) by accepting a pre-money pool term sheet clause.
Frequently Asked Questions
What is the "Option Pool Shuffle" and how should founders negotiate it?
The Option Pool Shuffle is when an investor offers a seemingly high pre-money valuation (e.g. ₹12 Cr) but requires a 10-15% unallocated option pool created in the pre-money. Because only founders dilute for pre-money pools, the real valuation is 10-15% lower. Founders should negotiate option pools based on actual 12-18 month hiring plans rather than arbitrary percentages.
Calculators on this platform provide indicative mathematical estimations based on industry-standard financial appraisal models (including Tandon Committee Method II, Nayak Turnover Method, and standard compound amortisation).
They do not constitute a formal facility sanction, credit commitment, or legal advisory from SME PAISA or any partner banking/NBFC institution. Final terms, interest margins, security stipulations, and credit sanctions remain strictly subject to formal credit appraisal, audited balance sheet verification, CMA Data assessment, and risk committee approval by institutional lenders.
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