If they go public, you would have opportunities to sell after vesting period, right? 
 Those are valid stock options, they won't get invalidated due to IPO.

Consultant

If I’ve got an offer with ESOPs, but the vesting starts after a year and the company might go public before I complete a year. Been told by friends that no organisation has ever respected ESOPs tha...

Welcome to Indian Startups's Private Community

If I’ve got an offer with ESOPs, but the vesting starts after a year and the company might go public before I complete a year. Been told by friends that no organisation has ever respected ESOPs that aren’t vested if they go public. What are your thoughts? Anyone who has faced something similar?

Help me understand my ESOPs

Senior Program Manager

Help me understand my ESOPs- Grapevine

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

Product Manager

Welcome to Software Engineers's Private Community

I have some ESOPs($17k total) at my current company(startup, initial stage), vesting over 4 years with a one-year cliff (25% vested after my first year, monthly after). I have completed 1.5 years here.

I'm not sure if they're actually worth anything(no funding rounds since last 2-3 years, founder is saying he will raise in next 3-4 months), and I'm worried about the taxes when I eventually redeem them. Also I dont know about the redemption process. Could someone explain how this whole ESOP thing work, what the tax implications are, and where I can find more information?

what all should I ask to my manager/HR as we dont have any portal/guide where I can see all these information.
these are the questions I have rn
how to track how much is vested?
how do I redeem them?
can I not redeem them this year, will they still be available to me in next financial year?

ESOPs are confusing

Software Engineer

Welcome to Business Roles's Private Community

ESOPs is offered by an early age startup. What are the things I does be aware about? or ask the founders to clarify with me.

Human Resources

Welcome to Personal Finance's Private Community

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 vested over 4 or 5 years?

Software Developer

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?

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

Hi, Say a Series B (US) funded startup gives me 3000 shares which are worth $5/share. It follows the usual vesting period of 4 years. Now assume 4 years have passed and all the 3000 shares are vested but the company hasn't gone IPO. 

Here are my quesions

- When exercising US stocks in India, what is the % of withholding tax I should pay?
- Say if I exercised all the shares and if I decide to leave the company do I get to keep those exercised shares with me forever?

I prefer answers from people who have exercised ESOPs before. I don't want answers like "It depends, Talk to your HR or CA". Appreciate any inputs.

Question on US based ESOPs in India

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

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

Hi Guys, what is the “Exercise event” for the ESOPs allotted by Indian startup’s?

Note: Exercise event means when the vested ESOPs can be allotted.

I have come across a couple startup’s which have a very sketchy Exercise event I.e 4 years after vesting of “all the allotted ESOPs”

So I’m trying to figure out how other startup’s are doing it in BLR/Metro cities in India.

ESOP Exercise Query

Hi folks, 

I'm Kashish, the CEO of EquityList and Founder of Cloud Capital which I run as a solo GP.
A little bit about what we do: 

EquityList is a full-stack equity management platform by AngelList India. Companies across India, US and Singapore use EquityList to manage their cap table, stock options (ESOP/SAR), shareholders, and related compliances. Managing equity for 10k+ stakeholders, 250+ companies and ~$1B in stock options.

Cloud Capital has deployed $8M+ in 55+ startups such as Airmeet, Rupifi, Orange Health, DevRev, ZET (OneCode) and others. I've also angel invested in startups such as OSlash, Atlys, Chronicle, Even Healthcare and others.

Excited to do this AMA, and look forward to answering any of your questions about ESOPs, cap table management, investing, entrepreneurship, and more!

LinkedIn: https://www.linkedin.com/in/kashisharma

Live AMA: Hey everyone, I'm Kashish, CEO of EquityList. Ask me anything!

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

During appraisal cycle I had asked for a hike in Salary after knowing I’m getting peanuts. 

Manager: Have ESOPs we will do buy back in next year and like I have gotten 2-3 ESOPs but no real money hike. 

Is this happening with you all? How do you deal this? Is it time to quit the org?

My best thing about manager

Please share the knowledge you've about these two!

ESOPs vs RSUs

Product Owner

I have some vested ESOPs.
I want to buy the shares from a private company that granted the ESOPs.

The ESOPs grant letter is paper based on company letter head.

I wanted to exercise my partially vested options, I wanted to know a few things.

Could the company play any delay tactics?
Let us say I email them Today.

What's ideally be the tentative timeline to excercise the options, given I have money to buy and hold the stock.

If the valuation at moment is unknown, could it be bought at last known valuation?

Process to exercise the vested ESOPs.

I am at a VC backed early stage startup. Have been offered Esops.l but have no clue on this.  Can somebody explain to me how can I make money from ESOP by answering these-

1) Do I have to buy them post vesting period? If yes, what amount do I need to pay? Also will there be text on this purchase itself?

2)) When the company buys back from me assuming my vesting was over and I could hold them on, what's the amount I will get? I am assuming it's (no of options * current share price) - (no of options * strike price issued to me). Is that correct? If yes, how is the current share price calculated for non listed company?

3) Now when the company buys these, what's the tax I have to pay? I am trying to understand if availing options and selling options are different and if both have taxes

4) What happens in IPO? Who buys from me? Where can I sell? What price do I sell at?

Help me understand my ESOPs

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