Venture Capital William B. Asher, Jr. Testa, Hurwitz & Thibeault, LLP Boston, MA 617 / 248-7000 asher@tht.com tht.com		How much equity should be set aside for employee stock options following completion of a venture financing? Venture investors generally agree to a carve out of 10% to 15% of the fully converted equity for employee stock options. The exact percentage will depend upon the company's anticipated hiring needs over a two to three year period; e.g., is there a need to attract experienced senior management via significant equity incentives? The option pool can be replenished later if the company's growth justifies an increase. The option pool is frequently a key negotiating point with investors, as it can significantly affect investors' projected rate of return.

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