The third dimension is how many.
The how many dimension has two parts to it.
How many options per employee and how many options in total as in the total stock options
pool.
How many options should you grant per employee?
What number is the right number and how do you decide that?
Well, here we use the principle of attractiveness.
In a certain growth rate, what amount would be an attractive amount for an employee at
a particular role criticality?
We will discuss this in detail when we do the numbers, but broadly what you need to ensure
is that the number of options must be such that they are attractive to the recipient.
The second part is how many overall meaning what must be the total stock options pool
of the company and out of that how many do you give out today and how many do you reserve
for the future.
Here you might have your own restrictions or those placed by your investors in some cases.
Now look at the interplay between this dimension and the last one.
You have a certain overall limit that you cannot exceed.
Within that limit, you need to ensure that whoever gets stock options should get a number
that is attractive enough for that role.
If you are ever in a situation where the stock options pool is too small and you cannot cover
all your people adequately, then consider reducing your coverage.
You can try reducing the individual number of stock options so you try and cover as many
people but beyond a point it does not make sense to give them out to a large number of
people.
Because that might mean giving out peanuts to everyone and it may not motivate anyone
at all.
Attractiveness also depends significantly on your growth rate over the next few years
and we will see how when we do the numbers.
As a founder, you need to balance these forces and customize your scheme so that it is right
for you.