Article · 18 min read

ESOP 101: How to Set Up Your ESOP Pool as an Indian Company

EquityList Free Intermediate India

This draws the exact line you are asking about with Indian numbers: a late-joining co-founder lands at 20 to 40 percent, while even a pre-seed CXO gets 1 to 3 percent and a senior individual contributor 0.2 to 0.7 percent, all out of a 10 to 15 percent ESOP pool. Put your candidate on that scale and the gap between founder equity and an ESOP grant becomes impossible to blur with a title. It also covers the India-specific mechanics: pool sizing, board and shareholder approvals, and vesting under Indian company law.

  • Late co-founders (joining 6-plus months in) sit at 20 to 40 percent; if you are offering under 20 percent, they are an early employee, not a co-founder.
  • Early hires draw from a 10 to 15 percent ESOP pool: CXOs 1 to 3 percent, senior ICs 0.2 to 0.7 percent, junior roles under 0.2 percent.
  • Indian ESOP grants need formal board and shareholder approval and standard 4-year vesting with a 1-year cliff, so plan the paperwork, not just the percentage.
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The question it answers

  1. Should I give a co-founder equity or a salary if they join after I've already started?

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