Employee equity
Build an option-pool hiring forecast
Estimate equity-plan demand from roles, grant sizes, and timing, then compare the forecast with available reserve and financing assumptions.
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Start with available reserve
A hiring forecast compares proposed grants with shares still available in the intended plan. Start from the plan’s current available balance after commitments and recorded events. The original reserve is not necessarily the amount left for new hires.
Separate actual grants from forecasts. A hiring budget can inform a future reserve increase, but it does not itself adopt the increase or grant equity to anyone.
Add grant demand by role
Assume an eligible plan has 300,000 shares available and the company proposes the following grants. No other awards or reserve events occur in this example.
| Role | Hires | Shares per hire | Total |
|---|---|---|---|
| Engineering | 4 | 40,000 | 160,000 |
| Sales | 3 | 20,000 | 60,000 |
| Executive | 1 | 150,000 | 150,000 |
| Total demand | 8 | 370,000 |
The shortfall is 370,000 − 300,000 = 70,000 shares. The month it occurs depends on when each grant is made, so attach dates to the role assumptions.
Make the percentage denominator explicit
At a fixed 10,000,000-share fully diluted denominator, a 0.4% per-hire assumption represents 40,000 shares. If that denominator changes, a percentage-based forecast can produce a different share count.
That forecast is not the same calculation as granting enough new equity to leave a person with exactly 0.4% after all new grants and financing adjustments. In Cap Table, percentage-sized hiring rows use the current fully diluted count. Review the displayed share equivalent.
Carry demand into the financing model
Review the company total and each destination plan’s capacity. Use the forecast to inform a proposed pool top-up, then inspect the resulting financing dilution. A pre-money top-up affects the round’s capitalization and price calculations.
When an actual grant is issued, reduce or remove the corresponding planned demand. Otherwise the forecast can count the same hiring intention again after the real award has used reserve.