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.

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