The firm usually has a vesting event then only they can get the payout

Software Engineer

Yes.. ESOP buyback happens at the vesting event or at IPO

Education

Got a buyback from my last seed startup when leaving as an early employee, so it does happen. Although the amount wasn't a lot for me.

Product Engineer

See you can get a buyout and they do happen. It's just risky and that's as probably it'll be years before the business is in good shape to compensate you. So suggest evaluating both the trust aspect of the founder and whether you honestly believe that the company can grow big

Founder

Should we consider ESOPs comparison too while comparing two offers?

Ever heard about people getting payout for their vested ESOPs when they exit the firm? Does this really happen?

Welcome to Software Engineers's Private Community

ESOPs

ESOPs- Grapevine

Welcome to Indian Startups's Private Community

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

Product Manager

I'm currently a front end dev in an early stage startup, been more than 1.5 years here, joined as a UI dev took up frontend. I've just got ESOPs and wanted to know what do people think. Not thinking of switching right now cuz recession, but does ESOP turn to money often. It'll get vested until 2027 btw.

Got ESOPs. Stay or not?

Frontend Engineer

Welcome to Personal Finance's Private Community

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?

Chartered Accountant

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

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.

have been seeing a lot of startup’s having multiple CXOs leaving within a short duration of them becoming profitable.

Is this another cost saving measure?

What do CXO exits in a profitable startup mean

Little context, I worked at a startup for 2yrs and got 50% of my esops vested. It's been 6 months now after I left the startup. Now, I am looking forward to buy my options which were bested and further sell it to folks interested.

How should I go about it? Please suggest me how should I go about it. All kind of suggestions are welcome 🙌

How do I sell my equity?

Generalist

Hi, I have an ESOPs related question. Appreciate any inputs. 

Consider a Series B startup providing an employee with 5000 shares. After 2 years, 2000 shares are vested and exercised by the employee. The stocks were never liquidated because the company didn't conduct buyback nor went IPO. 

Now, assume the company lays off that employee after 2 years,

- Can he still hold the vested and exercised 2000 shares? 
- If yes, then can he sell those stocks during future buyback even if he isn't an employee?
- Will the company provide accelerated vesting for the remaining 3000 shares during layoff? (not mentioned on offer letter)

Question on ESOPs

Analyst

Welcome to Product Managers's Private Community

I work in a fintech company. Revenue and growth wise we are good, we just got acquired by a large internet platform too. Also, last year has been a tremendous learning for me as well. I like being PM but looking to move out of my current industry (lending) as I want to explore other domains and I feel like my CTC here is somewhat low (18.5 + 1.5 bonus) considering my experience (around 4.5 years). My boss said that I will get ESOPS (around 10 lacs) which I can liquidate around 50% this year. Should I wait for my appraisal to complete (will happen around April) and look to switch or should I start preparing for interviews now itself?

Company is good but CTC pinches

I am in discussion with some very early stage startup and if things work out then will be part of the founding team. They have promised to give me same salary as the current company’s salary but give ESOP. Is ESOP worth it if you are founding team member?

The founder has sold his previous company so higher chance of success it looks to me.

Is there any case where person made huge money on ESOP?

Are ESOP worth it? Did it make anyone billionaire?

Engineering Manager

Guys, what are your successful ESOP stories? How much did you made? 
And what did you do with that money?

Software Developer

Truths about ESOP 101 

After working in multiple fast growth startup’s and having been part of multiple buybacks as well as being in the startup ecosystem for a decade I want to put to bear my pov about creating wealth through ESOP. 

Like any other randomised event, ESOP also follows Pareto principle which means a very small number of people within the company ever make sizable wealth that they elevate to the top 0.1% of the country. 

The Pareto also applies with companies; significantly small minority of companies in India have employee friendly policies which enables an employee to create wealth. 

Most startup’s have dark patterns within their esop policy which either locks you in for insufferable durations or forces you to pay exorbitant taxes to gain the right to exercise your esops when you are leaving the company. 

Survivorship bias plays a huge role in enabling the narrative that esop is a great wealth generating tool leading to rude awakening for an employee after they join a company. 

This doesn’t mean you can’t make wealth, it just means don’t get carried away by narratives and take preventable errors in your career. 

Always talk to multiple people in startup’s and ask relevant questions to understand esop policies better. 

Like everything else optimising only for esop for wealth creation will mostly not result in it.

Unmasking ESOP wealth!

Consultant

Please share the knowledge you've about these two!

ESOPs vs RSUs

Product Owner

One of my friends who works for a healthcare startup owns 30 shares at a premium of 75k per share. Company's share value went from 10k in last year to 75k this year due to fund raising event. Is it a good idea to vest now or wait for more returns? Further fund raising events ahead next year. What could be the value after 3 -5 yrs.

ESOP Suggestions

Business Analyst

Where did you work and how much money did you make?

Asking as it looks like a lot of promise of ESOPs and wealth creation has failed employees in this bloodbath slow growth, layoffs, and job changes.

"ESOPs made me rich af"

I have had ESOPS in 2 companies 
#1 - company got acquired ..I got 45 Lacs IN ESOP ...thats 1.5X of my last annualized salary  ( so additional salary for 18 months) 
#2 - Company became unicorn ... I quit and company bought my ESOPs . Got 2 Cr
That is 3X of my annualized salary

Company 1 - I had joined at very early stage ; Company 2 - I joined at mid-stage

UX/UI Designer

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 ?

Should esops component  be mentioned in offer letter?

So i got the ESOPs in my current company and now they want me to exercise it as it is mandatory to exercise the ESOP in a certain period of time. What will happen once I exercise it?? Also i am thinking of quitting the company so what will happen to the exercised ESOP if I leave the company??

Please give any resources to understand the complete what, how and when of the ESOPs and general summary regarding it

Can anyone please explain to me the ESOP thing??

I have worked in a startup which gave me ESOPs. I left the company and they have passed on to me my share of vested ESOPs in zenequity.

Do I need to mention this while filing ITR? Do I need to pay tax on it?

ESOPs in ITR

Generally speaking, is ESOPs fully vested in 4 or 5 years? 
I am aware of 4 years vesting period which is common everywhere. However, the startup where I work decided to introduce ESOPs with a cliff period of 1 year (which is standard) and the remaining shares to be vested will be done in the remaining 48 months. That’s five years altogether. Also, there’s a clause that on termination of employment, the shares should be exercised without which they will be revoked. 
The CXOs say that it’s a standard YC template. Am I being lied to? 
Would it be right to say that this is not an employee friendly ESOPs?

ESOPs

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