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.

Software Developer

Risk is there but at least u can cash out

Software Engineer

Product Manager

Half your ESOP(based on valuation correction by BlackRock for Indian start-ups) and yes then it may be useful

Senior Consultant

Growth Manager

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 20...

Welcome to Indian Startups's Private Community

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.

Are ESOPs worthless?

Are ESOPs worthless?- Grapevine

After reading this article, it seems like early players who have become big had the fortune of liquidity. What do you think about more recent startups in last 5yrs or so?

https://www.moneycontrol.com/news/technology/esop-cashout-events-drop-by-62-in-2023-as-funding-winter-bites-11987051.html

Esop Liquidity is becoming lottery??

Welcome to Product Managers's Private Community

Hey folks, 
Got a full time offer as an APM and they offered: 
1. 10 LPA Base
2. 1 lakh Retention Bonus (will be given in the first month) 
3. 1 lakh ESOPS

Should I accept or negotiate for more? If I negotiate, which component should I negotiate and how much? 

Thanks in advance.

APM Fresher Salary

This post is for younger minds to not fall for ESOPs as a wealth creation tool.

Why do I say that? 

ESOP pool is generally less than 10% of total equity distributed among thousand and ten thousands of employees. The share you get is miniscule. 
Founders saying that the pie will be big enough so that this percentage will matter is a hyper-optimistic prediction with nothing to back it.

You have to ideally wait till IPO to even make the miniscule amount. Very few companies buyback and fewer will do post-ZIRP 

ESOPs only give you the option to buy not right to buy. Company can in some circumstances take that right away. People in positions of power should negotiate for rights not option. 

The success rate of startups is less than 10% which means the chances of this miniscule amount is low. 

Overall, lowering your salary for more ESOPs won't make sense unless you are convinced that the startup will go big.

The ESOPs lie

Product Designer

I’m considering joining as a founding engineer at an early stage startup who is just about to sign a $4M seed round.

They offered to match my current base and a $20,000 in ESOPs. 

When joining at such early stage companies, how should I think of ESOPs so that I can better negotiate. I’m banking on this idea going big and I want to get as much ESOPs as possible to maximise my returns in the future.

ESOPs in early stage startups

Welcome to Business Roles's Private Community

I have 6 years experience. My current base/fixed is 60 LPA. (I also got a 5 lakh bonus and 5 lakh of my ESOPs vested this year making my total vested about 30 lakh. So the total comp is 70). 

I'm being offered a senior engineer position in an early stage startup (as part of the founding engineer team). They haven't given an offer yet.

Being early stage, the emphasis will most likely be on ESOPs. How do I evaluate this and set my expectations? (If I were to switch to a mature company, I believe the hikes usually are between 15-20%? How does this work for early stage startups?)

Salary expectation at early stage startup

My profile: EX. Founder turned Product+ strategy person
YOE: 5+
ESOPs: 80 lakhs 
Cliff: 1 year
Vesting period: 48 months

I am still thinking after how many years it will be valuable given the liquidity is very rare for ESOPs. Any thoughts?

Are your ESOPs worth it?

Product Owner

Hello guys,
I would want to know what is the benefit of getting ESOPs in an early stage startup?
The startup has a great team and working on a promising product. 
I have been offered a package with somewhat lower fixed component and somewhat higher ESOPs. Need insightful pointers here. TIA :)

Value of ESOPs in early stage startups?

The ESOP is a bit of a blind bet.  
  
 It's paper money that can get you a windfall if all goes to plan and execution, solution, pricing, market readiness amongst other things, all line up over the next few years.  
  
 I wouldn't take a pay cut in lieu of ESOPs.  Keep the real money real and the paper money as an outside bet.

Sales Manager

Welcome to Personal Finance's Private Community

How do you understand that Esops alloted in ctc are good enough?
Do companies have them fixed as percentage of ctc (ex. 30% of ctc) or how does it work?

What are the questions i can ask to get a better understanding of the Esops?
One would be current valuation, last buyback time, what else?

Is there any good resource to understand this?

How to evaluate ESOPs?

The data nerd in me loves this feature very much! Pay transparency is very cool.

Although, I'm miffed to realise that Big Tech compensation is still top of the market.

Grapevine Salaries is awesome!

Welcome to Office Gossip's Private Community

What's the value of your ESOPs when allotted to you and their worth now? Or they just melted like soap?

ESOPs or SOAPs??

Business Analyst

Welcome to News Discussion's Private Community

2022 has been the year of ESOP value destruction. Lets collect some real instances here. This silent but deadly phenomenon is hardly reported in mainstream media.

ESOP value obliterated

I joined my present company a year back, my peer has been here for 5 years and holds RSU's amounting to 1.5 crores (Share value got 4x in 5 years).

How many of you have generated substantial wealth through ESOP/RSU?

Chartered Accountant

I have read somewhere that 90% of the People who receive ESOP are never able to benefit from it?  (Company not doing well hence never able to sell it). Etc

Are ESOP's real?

Please share how your company esop policy is. Is it really valuable for employees or just used to create hype and retail talent. 
How many years can you exercise them after resignation?
How did the taxation go if someone has been lucky enough to convert it to cash?
Should esops be a factor while leaving current company or joining a new company?

Are ESOPS really worth it? Has anyone built considerable wealth through it? Share experience.

How much ESOPs can I ask from an early stage startup (incubated). Valuation is around 12 cr. 
I have agreed to take a 50% paycut on my fixed, but not sure about ESOPs. Please advice.

ESOPs doubts

Welcome to Software Engineers's Private Community

Hello All,

I interviewed with a startup recently and some of their policies around esops was something I encountered for the first time in my career, so wanted the expert advice of the community on next steps.

Surprise one: ESOPs will be allocated post probation period of 3 months and vesting starts from there and not the date of joining, I was surprised on this but upon discussion with the company POC I was given a reason of the legal fees involved, which sounds fair but the vesting schedule is it employee favourable?

Surprise two: They shared an offer letter with only the fixed component and said ESOPs will be evaluated post completion of probation period basis performance. Upon further discussing in this I was informed that this is a standard format their VC(sequoia, a16z and elevation) have approved. Is this true because I asked around few of my friends and all of them said esops are an integral part of the startup compensation and all of my and their offer letters historically had esops mentioned along with their value. 

Wrt to point 2 an I asking too much or some practice has changed in the industary which I’m unaware about. Also esop value post probation evaluation, is it employee friendly as the employee is in non negotiable position, isn’t it ?

Are ESOPs worthless?

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