Option Pool Overhang refers to the dilutive impact (actual or anticipated) of a large unallocated option pool, or the expectation that a pool must be increased in the next financing to support hiring plans. In fundraising negotiations, Option Pool Overhang can pressure valuation because investors price in future dilution, and Option Pool Overhang is often discussed when aligning headcount plans with capitalization.
Ryan RobertsStartup Lawyer
Ryan Roberts is a startup lawyer with more than two decades of experience advising on venture financings and M&A transactions totaling more than $1 billion. He is the author of the Amazon bestselling startup law book Acceleration.
