How can I grant fewer options?

You should do two things:

  • Increase the “Value of One Stock Option” on the assumptions/investments/options screen. You'll have to play around with this value until you get approximately the right distribution on the cap table. For example, changing the “Value of One Stock Option” from $.01 to $.10 will result in one-tenth as many options being granted; changing it from $.01 to $1.00 will result in one-hundredth as many options being granted, etc. You should have to do this just one time to calibrate the model based on all the rest of your assumptions (like number of founders' shares, values of option packages to employees, your desire to distribute equity among the three classes of shareholders, etc.).
  • You might want to increase the “Annual Increase in Value of a Stock Option” on the assumptions/investments/options screen. By default, it is set to 10%. That implies that you think the company will increase in valuation by 10% per year. High growth companies generally increase in value by 50% to 100% per year. By making this number higher, you will also decrease the drain on stock options.

Related Questions:

How do I see the cap table?

How do I determine if my cap table is reasonable?


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