Are ESOPs worthless?
Funding winter has taught us that cash is king. How should one negotiate ESOPs now that it is clear that almost all unicorns are overvalued? Startups are still peddling ESOPs to new employees at 2021 valuation which will get corrected sooner or later.
It is rare to see buybacks and IPOs in India. I have seen VPs and early employees hold millions in paper money waiting for a way to cash it since 5-10 years.
Transitioning to a public company like the FAANGs makes your salary 2x automatically since the stocks become relevant
Public stocks also come with a risk.
A friend joined coinbase when it's stock price was more than 300$, now it's around 50$. His stock component went from 20 lpa to less than 3 lpa.
Same with many other publicly listed companies.
Cash is definitely the king. So high base is important and RSUs/ESOPs doesn't benefit most of the people.
Risk is there but at least u can cash out
Yes
Yes totally
Half your ESOP(based on valuation correction by BlackRock for Indian start-ups) and yes then it may be useful