Co-founders, team & legal

How much equity should I set aside for an ESOP pool for employees?

Carve out roughly 10-15% for an option pool before you raise, so early hires get real ownership without diluting you unexpectedly later. In India, structure it as a formal ESOP scheme approved by shareholders and mind the perquisite tax at exercise, it's not just a spreadsheet. Reserve it early; scrambling to create a pool during a fundraise weakens your position.

Go deeper

2 resources, 2 link-checked.

📄 Article
✓ Link checked India Free Advanced

The official Indian government primer on structuring ESOPs for startups, a primary source on the rules that most blog posts paraphrase. Essential before you promise equity to early hires.

Employee Stock Options for Startups (Startup India)

From startupindia.gov.in by Startup India / DPIIT Official primer

  • ESOPs must be approved by at least 75% of shareholders
  • The gap between market value and exercise price is taxed as a 'perquisite'
  • ESOPs are a core tool for hiring and retaining early talent when cash is tight
Open startupindia.gov.in →
📄 Article
✓ Link checked India Free Advanced

A detailed, clause-by-clause drafting guide with Indian legal context, including enforceability and state-wise stamp duty, that goes deeper than a generic template. Written for Indian founders specifically.

Co-Founder Agreements in India 2026: A Comprehensive Drafting Guide

From lawsikho.com by LawSikho Long read

  • Enforceable under the Indian Contract Act only if properly executed and stamped
  • Must-have clauses include vesting, leaver provisions, IP assignment, and deadlock resolution
  • Stamp duty varies by state, so localize the document
Open lawsikho.com →

People also ask

How should co-founders split equity fairly? 2 → What is vesting and why do I need a vesting schedule? 2 → Should I use a dynamic equity split like Slicing Pie instead of fixed percentages? 2 → What must go into a co-founder / founders' agreement in India? 2 → What happens to equity if a co-founder leaves early? 2 → Should co-founder equity be split before or after we have raised any money, and does it matter that one of us is putting in cash? 3 →

Also in D2C

The same ground, over in Get legal & compliant, our D2C track.

Do I actually need product liability insurance as a small D2C brand, or am I overthinking it? 3 → I'm just starting out, should I register as a proprietorship, LLP, or private limited company? 4 →

Also in How Founders Use AI

How founders actually use AI for this, over in Legal & Contracts.

Why review contracts with AI before paying a lawyer? 19 → How do founders handle NDAs, ESOPs, term sheets, and compliance questions with AI? 19 →

Also in GTM

The same ground, over in Build the team, our GTM track.

When do I stop selling myself and hire my first salesperson? 5 → I have been handed a comp plan. How do I work out what I will actually earn? 5 →
eChai Partner Brands The partnership →