Team, Co-founders & Legal

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

A starting point

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

Hand-picked from around the web, each with a note on why it earns your time.

3 resources 3 link-checked

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📄 Article
✓ Link checked India Free Advanced

Why we picked it 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 Intermediate

Why we picked it A practical India-specific walkthrough of equity split, vesting, and IP clauses in a co-founder agreement, from a mainstream Indian legal services provider. It covers what a US template will miss.

Co-Founder Agreement India 2026: Equity, Vesting & IP Guide

From vakilsearch.com by Vakilsearch Long read

  • Standard vesting is 4 years with a 1-year cliff, applied to every founder
  • Assign all IP to the company in writing from the start
  • Cover roles, decision-making, deadlock, and exit, not just percentages
Open vakilsearch.com →
📄 Article
✓ Link checked India Free Advanced

Why we picked it 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

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