Option Pools & Capitalization

The video tutorial explains how companies use equity compensation, such as stock options, to motivate employees and contractors. It covers the creation of option pools and their impact on company capitalization. Stock options provide a contractual right to purchase company stock at a set price, incentivizing stakeholders by aligning their interests with the company's success. The tutorial also discusses the importance of tracking these options on the capitalization table to understand the company's fully diluted capitalization.

Why do many companies choose to compensate employees and contractors with ownership interests instead of cash?

What is a stock option and how does it benefit employees?

What is an option pool and why is it important for a company?

Explain the process of creating a stock option plan within a company.

What are the differences between non-qualified stock options and incentive stock options?

How do stock options affect a company's capitalization?

What does fully diluted capitalization mean in the context of stock options?