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Bhavya Sharma

Our Expert Due Dilig... • 6m

Hello everyone, I am Bhavya from Bhavya Sharma and Associates where we manage multiple startups and organisations for their startup finance, CS and legal services. We handle quite big startups and I am here to answer all your doubts around startups,

Kashinath Tilagul
•

ABATA AI • 6m

Types of equity which can be given to employees. eg; sweat equity , kindly explain them

Bhavya Sharma

Our Expert Due Dilig... • 6m

Under the Companies Act, 2013, a private company in India can offer the following types of equity to employees: 1. Employee Stock Option Plan (ESOP) - ESOPs are issued under a scheme approved by shareholders through a special resolution. - Employees can exercise their option after a specified vesting period. - The vesting period cannot be less than one year. - ESOPs are a common tool to retain employees and link their interest with the company’s growth. 2. Sweat Equity Shares - Sweat equity is issued at a discount or for consideration other than cash. - Private companies can issue sweat equity up to 15% of the existing paid-up equity share capital in a year or ₹5 crores, whichever is higher. These are the few most important pointers. Rest, it is a detailed topic which can be implemented according to size, stage of the company.

1 replies2 likes

Replies (1)

Rakesh

Exceptionally latent... • 6m

can you recommend some resources to learn about overall finance in a startup from their employee stock options to their funding rounds and all.

0 replies

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Anonymous

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I am planning to create a large esops pool for my startup of around 20% and give my co-founder (tech) around 35% equity over a three-year vesting period. In this case, if I raised capital at 10% dilution in a pre-seed or seed round, I may end up with

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Anonymous

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90% valuation cut basically means the founder equity and ESOPs must have been wiped off 🤯

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ESOPs are a form of employee benefit that grants workers ownership in the company through allocated shares, aligning their interests with the organization's growth. These plans are crucial as they: 1. Boost Motivation: Employees feel more invested i

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Anonymous

Hey I am on Medial • 1y

So basically a bunch of employees received Rs. 65 Cr distributed amongst them 😳🔥 Wealth can only be created by shares/esops!

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Anonymous

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Here is a picture explaining different private equity strategies! Hope it helps!

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ESOP (Employee Stock Option Plan) What it means: A plan allowing employees to buy shares at a discount. Why it’s important: Motivates employees to stay and grow the company.