---
title: "What Is Option Pool Refresh?"
term: "Option Pool Refresh"
description: "An option pool refresh is the increase of a company's employee equity pool, usually approved by the board and often tied to a new funding round, so the company can grant options to future hires."
date: 2026-07-25T00:00:00.000Z
updated: 2026-07-25T00:00:00.000Z
topics: ["venture-capital"]
source: https://venturecapitaltracker.com/glossary/option-pool-refresh
---

# What Is Option Pool Refresh?

> An option pool refresh is the increase of a company's employee equity pool, usually approved by the board and often tied to a new funding round, so the company can grant options to future hires.

An **option pool refresh** is the act of enlarging the employee [option pool](/glossary/option-pool)—typically to a target percentage—so the company can grant equity to new hires after existing reserves run low.

### How it works

Before a Series A or B, the CFO maps planned hires against remaining pool shares. If the pool is down to 2% unallocated but the plan needs 12% for the next 18 months, the board and new investors agree on a refresh—say, expanding the pool to 15% fully diluted. The refresh may happen immediately before the round closes (pre-money) or after new investor shares are issued (post-money).

Pre-money refresh dilutes only existing shareholders; post-money refresh dilutes everyone including new investors proportionally. Term sheets specify the target pool size and timing. Lawyers update the cap table and equity plan share reserve in the same closing documents as the priced round.

Investors sometimes tie refresh size to a hiring plan spreadsheet listing role, start date, and equity grant. That makes the negotiation factual rather than a arbitrary percentage pulled from market norms.

### Why it matters

- **Founders:** Refresh size and timing can cost more than a valuation tweak. Model fully diluted ownership with your lawyer before you celebrate the headline price.
- **Investors:** A right-sized refresh protects the company's ability to execute the plan without a messy second negotiation six months later.

### Common mistake

Agreeing to a refresh percentage without a hiring plan. Investors may ask for 15–20% at early stage; push back with a headcount-based grant schedule if the number is larger than you need.

### Related ideas

See [option pool shuffle](/glossary/option-pool-shuffle), [option impact analysis](/glossary/option-impact-analysis), and [ownership percentage](/glossary/ownership-percentage).

## FAQ

### What is an option pool refresh in simple terms?

It means adding more shares to the employee option pool—often bringing it back to a target percentage of the company—so you can keep hiring after the current pool is mostly granted.

### Why does option pool refresh matter?

Investors want the company staffed to hit plan after their check lands. Founders need to negotiate how big the refresh is and whether it dilutes pre-money or post-money, because that changes everyone's ownership.


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Source: https://venturecapitaltracker.com/glossary/option-pool-refresh