While several Indian companies like Zerodha, Urban Company, Razorpay, and Swiggy have successfully created wealth for their early employees through structured ESOP buybacks, many startups still treat ESOPs primarily as a retention tool rather than a true wealth-building opportunity. ⚠️  The fine print often hides critical loopholes—board approvals for exercising options, lack of liquidity events, investor-first clauses, and tax complications. Without clarity, what seems like a lucrative equity package can turn into an uncertain, locked-in promise. ⛔  If ESOPs form a significant part of your compensation package, dear tech executives you should treat them with the same scrutiny as your base salary. ✅ Here are key questions you should ask before signing the offer:   💰 How do I get paid? Are there clear timelines for exercising options?    💸 Is there a clear path to liquidity? Will there be secondary sales, buybacks, or an IPO timeline?   📉 What happened to past employees’ ESOPs? Did they realize actual value, or were their options forfeited?   📜 Do I need board approval to sell my shares? If yes, under what conditions?   ⚖️ What are the tax implications? Will I face tax burdens at the time of exercise, sale, or both?   🚪 What happens if I leave the company? How long do I have to exercise my vested options?   🔄 Is there anti-dilution protection? Will my ownership get diluted during future funding rounds? 

The ESOP Paradox—Ownership Without Control?

While ESOPs promise a stake in the company’s success, they often come with hidden constraints—from long vesting periods to unpredictable liquidity events. The real question is: Are you an "owner" in the true sense, or just holding conditional stock that you may never cash out?

Before signing, consider this: Would you invest your own money under the same terms as your ESOP agreement? If the answer is no, it’s time to renegotiate—or rethink the offer altogether.

True wealth isn’t just about having equity—it’s about having the power to realize its value. Make sure your ESOPs give you both.

Authored by Soumi Bhattacharya

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