The presentation will examine what is common to the startups that have achieved unicorn status and look at how ESOPs have played a role in their journey. The webinar will provide answers to questions like: - Why are ESOPs relevant? - How can ESOPs be best leveraged? - What specific impact can a robust ESOP strategy have in driving growth and valuation? Many of the startups that have become unicorns have acknowledged the importance of ESOPs in their strategy.

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Topic: Can A Robust ESOP Strategy Help
in Making A Unicorn
Presented By: Uma Shankar Acharya
(Partner – Consulting)

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Introduction:
1.Growth is a never stopping aspiration
1.A Unicorn’s basic distinctions
Why ESOPs are relevant in a Pre-Unicorn
context

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Key features of a Unicorn
1.Necessarily a start-up – as the definition requires
1.Disruptive innovation – generally first movers
Deeply consumer focused – encashing of consumer pain points and greater reach
Extraordinary employee engagement – one of the key growth accelerators
Driven leadership – Leadership driving people, performance and value

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Relevance of ESOPs – Why and How?
1.5. Company commits but Market pays – this
possible and generally designed too
1.Huge tax savings – in line with exponential
valuation growth without expenditure
Why and how are ESOPs relevant?
1.1. Linked to company valuation – nature of ESOPs
1.Lower valuation – a key motivator for high benefit,
low accounting cost
1.2. High growth potential – Every stakeholders
aspiration
1.Substantial wealth creation – potential windfall
gains – a key motivator
1.3. Low in cash – May be inherent or designed for
operational efficiency
1.Cash salary rationalization – acts as currency for
hiring and retention
1.4. Capability to reward retention & performance –
periodic reward for motivation
1.Sustained corporate growth - attainment of
business and/ or valuation milestones

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Role of a robust ESOP Strategy
1.A comprehensive and strategic ESOP plan – Flexible structure to fit all, in sync with
business plan
1.An effective and ongoing communication strategy – making employees aware of status
of business and that of ESOPs
Adept Liquidity Event Management – Gauging of liquidity requirement of employees and
planning for effective monetization events
Effective day to day ESOP Management – getting into a system that suppresses admin
challenges and advances conveniences
Tax, accounting, and regulatory compliances – Regulator is a stakeholder too

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In a nut-shell
1.Number of Unicorns in India would continue to grow at a faster pace
ESOPs have been historically proved to assist in making of Unicorns
A robust ESOP strategy seems a pre-requisite

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About Speaker:
Uma Shankar is a member of the Institute of
Company Secretaries of India and Bar Council of
India.
Uma Shankar heads the legal, Tax and compliance
function at ESOP Direct.
During his association with us for more than 7 years,
Uma has advised more than 200 mandates in Plan
design, legal documentation and complex local and
international Tax advisory.
Prior to joining us, Uma has worked with PWC in
New Delhi. He has more than 15 years of experience
in corporate law and direct taxes. You can reach out
to Uma Shankar at umashankar@esopdirect.com
Uma Shankar Acharya
Partner – Consulting
Disclaimer
The materials and information on this presentation have been prepared or assembled by the Firm and are intended for informational purposes only. Any opinions
expressed on or through this presentation are the opinions of the individual speaker and may not reflect the opinions or guidelines of the Firm or the Industry.
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