We plan to bring eChai across 100 cities in India. It starts with eChai Startup Demo Day on 26 September, all in person. 11 cities confirmed, 313 founders registered. Any city that reaches 20 interested founders is on too. See your city
Co-founders, team & legal

How do I compensate early employees with salary and equity in India?

Pay a fair, honest salary you can sustain plus meaningful ESOPs from your option pool, early employees take real risk and should share the upside. Structure ESOPs as a proper shareholder-approved scheme and be transparent about vesting, strike price, and the perquisite tax at exercise. Don't oversell equity as a substitute for a livable salary; be clear-eyed and generous, not vague and stingy.

Go deeper

3 resources, 3 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 Free Intermediate

YC's full curated body of hiring wisdom, from when to hire to how to close and evaluate early employees. The best free, high-signal resource for founders hiring for the first time.

Hiring & Recruiting (YC Startup Library collection)

From YC Startup Library by Y Combinator Curated essays + talks

  • Wait longer than feels comfortable to make your first hires
  • Hire generalists with high slope, low ego, and comfort with ambiguity
  • Use paid work samples and honest reference checks over trivia interviews
Open ycombinator.com →
📄 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 →

Terms in this answer

Vesting

People also ask

When should I make my first hire? 2 → How do I hire my first engineer when nobody's heard of my startup? 2 → What kind of people should my first ten hires be? 3 → Should I hire full-time employees, contractors, or an agency first? 2 → How do I interview and evaluate candidates when I've never hired before? 3 → How do I write a job description that actually gets good people to apply to an unknown startup? 2 →

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