The reserved pool of company shares set aside for employee, advisor, and contractor grants, expressed as a percentage of the fully-diluted cap table and drawn down each time a new hire signs.
Cisco's 1990 employee stock plan, the first widely copied tech ESOP, set the precedent of a pre-financing pool large enough to fund eighteen to twenty-four months of hiring. Modern seed term sheets typically demand a ten percent post-money pool, sized to cover roughly twenty hires before the next round, with the dilution paid entirely by existing shareholders.