ESOP pool calculator: size, dilution and vesting (2026)
Indian startups typically reserve an ESOP pool of 5% to 15% of fully diluted equity, with 10% the common starting point at seed stage, and grant it on a four-year vesting schedule with a one-year cliff. Enter your valuation, round size, target pool and founder holding below to see the pool in shares, the dilution to founders from the pool and from the round, and how one illustrative grant vests over four years.
ESOP Pool Calculator
5% to 15% is typical; 10% is the common seed-stage ask.
The rest is held by existing investors or advisors.
Total shares held by founders and existing investors.
Cap table after the round
- Founders 70.0%
- New investors 20.0%
- ESOP pool 10.0%
| Post-money valuation | ₹25 crore |
| New investors take | 20.0% |
| Pool shares to create | 14,286 |
| Shares issued to investors | 28,572 |
| Fully diluted shares after the round | 1,42,858 |
| Price per share in the round | ₹1,750.00 |
| Founder dilution from the pool | 12.5% points |
| Founder dilution from the round | 17.5% points |
| Founders after the round | 70.0% |
How one grant of 1,000 options vests
4 years, 1-year cliff, then monthly| Month | 0 | 6 | 11 | 12 | 18 | 24 | 36 | 48 |
|---|---|---|---|---|---|---|---|---|
| Vested | 0% | 0% | 0% | 25% | 38% | 50% | 75% | 100% |
| Options | 0 | 0 | 0 | 250 | 375 | 500 | 750 | 1,000 |
| Share of company | 0.000% | 0.000% | 0.000% | 0.175% | 0.262% | 0.350% | 0.525% | 0.700% |
Nothing vests before month 12; 25% vests at the cliff and 1/48th of the grant each month after. An employee who leaves in month 11 forfeits everything. Tax: at exercise, the gap between fair market value and the exercise price is taxed as salary (deferred up to 48 months or until sale or exit for employees of DPIIT-recognised startups); at sale, capital gains. ESOP planning
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We send the cap table and vesting table, and can add a second scenario (a bigger pool or a different round) on request.
How this works
You enter the current shareholding (founders, any investors), the pool size you are considering and whether it is created before or after the next funding round, and the calculator shows the fully diluted ownership of every party after the pool is created, which is how investors will read your cap table.
You can then add planned grants by role and size, either as a number of options or a percentage of the fully diluted shares on the grant date, and the tool shows how much of the pool each grant consumes and how much remains for future hires.
For each grant it builds a vesting table using the schedule you choose, four years with a one-year cliff by default and monthly or quarterly vesting after that, so you can see what an employee holds at any date and what they forfeit if they leave early.
The calculator models ownership and vesting only; it does not value the shares, compute the perquisite tax at exercise (which needs a merchant banker's fair value) or draft the scheme, all of which our ESOP planning service covers.
Questions founders ask about the esop pool calculator
Should the ESOP pool be created before or after the funding round?
Investors usually insist it is created before their money comes in, so the dilution falls on the founders. Modelling both cases shows the difference: a 10% pool created pre-money dilutes founders by the full amount, while a post-money pool is shared with the new investor. Negotiate the size with a hiring plan in hand.
How large should individual grants be?
Early senior hires commonly receive 0.5% to 2% of fully diluted equity, mid-level engineers 0.1% to 0.5%, and later hires progressively less as the company's value rises. Grant a fixed number of options against a stated share count on the grant date rather than a percentage, which shrinks with each round.
What is a cliff and what happens if someone leaves before it?
The cliff is the initial period, usually one year, in which nothing vests. An employee who leaves inside the cliff forfeits every option in the grant. After the cliff, the first 25% vests at once and the balance vests in equal monthly or quarterly instalments over the remaining three years.
Does the calculator show the tax an employee will pay?
No. Tax at exercise is the difference between fair market value and exercise price, taxed as salary, and it needs a valuation report; tax at sale is capital gains. Employees of DPIIT-recognised startups can defer the exercise tax. Our ESOP guide explains both, and our tax experts compute the figures.
Can an LLP use this calculator?
Only for illustration. An LLP has no shares and cannot grant ESOPs, so the numbers do not translate into a legal scheme. A startup that wants a real ESOP incorporates as, or converts to, a Private Limited Company, and the scheme is approved by a special resolution and filed in MGT-14.
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