Not unless a "liquidity event" occurs. This could be one of:

- New round of funding, new investors replace the old
- Acquisition/merger by/with another company
- Buybacks, company itself buys shares from existing investors
- Third party willing to buy shares from you, and company allows the transfer
- Exit clauses, some have terrible "exercise or leave" clauses, forcing you to pay tax!

Would one be eligible for buyback even though one has left? 🤔

Software Engineer

Depends on the allotment clause, usually yes if they let you keep esops after leaving

ESOP cannot be converted easily into cash. It's only possible if any one of the above liquidity events occur for your company.  
  
 Also, it only makes sense to exercise the stocks if you think the company's valuation will increase in future. Given the current market conditions, it would be only possible after a year or so.  
  
 Will be easier to comment if you can share company name.

Product Manager

Rule of thumb - if they offer generously, its not worth it. If they are too stingy, they have no idea what they are doing.

Consultant

I have left company i own around equivalent to approx 6k equity shares. Have not excecised yet.   Any possibility to convert esops to cash

Welcome to Personal Finance's Private Community

I have left company i own around equivalent to approx 6k equity shares. Have not excecised yet. 

Any possibility to convert esops to cash

Require some honest understanding regards to esops

Require some honest understanding regards to esops- Grapevine

[Need help] I have 3 lakhs of Pine Labs ESOPs each year. Got this news yesterday where Neuberger berman has reduced Pine Labs valuation by 39%. Does this mean when I try to cash out 3 lakh ESOP, the actual value would be 39% lesser?

I have recently left Tekion and was considering executing my ESOPs. For executing my ESOPs I need to pay around $3.5 per esop to the company. Should I convert my esops to equity? Am looking for some advice from the folks who might have done this in the past.

Tekion ESOPs Execution

Hey 👋  
  
 I have worked with a lot of my clients who own ESOPs. 
  
 Some points to consider in your case: 
 1. Tekion is not a listed company. Finding a buyer for the shares will be difficult. Considering this, Are you comfortable holding the shares till IPO? 
  
 2. Tax: You will need to pay tax at the time of exercising ESOPs. Again, are you comfortable with paying tax upfront?  
  
 3. If you wish to sell shares through brokers, check if company has right of first refusal. This way, you can a good deal and sell the shares to company (prior to IPO).

Software Developer

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

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 ?

Should esops component  be mentioned in offer letter?

Welcome to Indian Startups's Private Community

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

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.

I am getting offered a 10L Esops for example, does that  simply mean i need to pay some amount  to get shares worth 10L of company at Actual Market Price?

I have got only RSUs until now so now idea how world of esops work and are they actual money?

Like If i’m at 40 CTC fixed and getting offer 48 fixed + 8L esops, am i getting 20% increment or 40% increment?

Explain Me like I’m 5 : What are ESOPs?

Let's assume youre stepping into your 5th grade. Parents tell you that they have 10 chocolates in the fridge and if you complete all the homework, pass exams with distinction and make them proud, they will give 10 chocolates and also extra.  
  
 So you work your ass off and kill your homework and exams. 
  
 If you have good parents, they will give you 2 chocolates per milestone [ESOPs buyback].  
  
 If you have good and rich parents, they will do as promised [company going IPO]. 
  
 Very common scenario - If you have bad parents, they will continue promising the existence of chocolates to motivate you but in reality there are no chocolates [company not doing buyback nor going IPO. ESOPs are just paper money with no value].

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

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!

I got a offer where i will get the equity. Does people really make money when company get sold considering in my case if i get 1% equity.

Also how does it work? Suppose when we start valuation of the company is 1 cr so my part will be 1L. Now in the next round suppose the valuation is 10cr then does it increase my equity to 10L or it dilute my % of equity?

Suppose if the company is sold at 100cr, do i really get 1 cr? Kindly let me know how it works and really people make money or not if it get sold.

Require some honest understanding regards to esops

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