Are ESOPs all that they’re cracked up to be?

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Editor's note: When I worked in a Chennai-based tech company from 2018 to late 2021, I got front-row seats to the rise of Freshworks: from being the first software-as-a-service provider to achieving the ‘unicorn’ valuation in 2019 to getting listed on the NASDAQ. The week that Freshworks got listed, my LinkedIn feed (and probably that of all my peers who were either working in SAAS or in Chennai) had amalgamated into broadly three types of posts: videos of Girish Mathrubootham ringing the NASDAQ opening bell while quoting Rajnikanth song lyrics, photos from excited employees who had had their face flashing on the NASDAQ screens during the listing, and long, emotional posts from longer-term employees who’d achieved their dream of buying a house or their favourite luxury car far earlier than they’d ever imagined they could, thanks to the company’s stock option programme. Employee stock options—the mythical, exponential reward that is earned by those who can grind their teeth and find their peace in the chaos of early-stage startup culture—are often not fully understood. Is it as simple as staying put? Or is …