ESOP for your Indian startup — designed, valued, and documented investor-ready.
Pool sizing, vesting structure, Rule 3 Merchant Banker perquisite FMV coordination, ESOP scheme document, board and shareholder resolutions, and grant letters — coordinated and managed so you never redo it before your Series A. Advisory fee ₹19,999 · Merchant Banker fee ₹74,999 (paid directly to SEBI-registered Merchant Banker) · Total investment ₹94,998.
Lekha designs your ESOP pool, vesting schedule and plan documentation for a fixed ₹19,999. Separately, the perquisite valuation at each exercise must be signed by a SEBI-registered Category I Merchant Banker under Rule 3, valid within 180 days of the exercise date. A trust-funded pool or sweat equity additionally requires an IBBI Registered Valuer under Rule 16(1)(c) or Rule 8.
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About this service
What is esop design, valuation & implementation?
Most startup ESOPs are designed reactively — when the first key hire asks for equity. The result is a plan with a wrong pool size, no formal documentation, and an exercise price that wasn't set with a merchant banker valuation. Investors find these gaps in every Series A diligence. Lekha designs the ESOP proactively — with the right pool size for your hiring plan, a vesting schedule that protects all parties, and the statutory Rule 11UA valuation arranged through our empanelled SEBI-registered Merchant Banker. Fee structure: Lekha advisory fee ₹19,999 (paid at checkout) + Merchant Banker fee ₹74,999 (paid directly to the Merchant Banker after Lekha sends you a payment link — not collected by Lekha). Total investment: ₹94,998.
What you get
Everything included in this service
ESOP pool sizing analysis
A model-based recommendation on pool size based on your 24-month hiring plan — seniority levels, market grant ranges, and the dilution impact at the current and next round valuation.
ESOP plan document
Formal ESOP plan document that defines: eligible employees, grant process, vesting schedule (including cliff), exercise price methodology, treatment on departure (good-leaver/bad-leaver), and treatment on change of control.
Board and shareholder resolutions
Board resolution approving the ESOP scheme and shareholder special resolution (required under Companies Act Section 62(1)(b)) — properly worded and signed.
Grant letter template
Individual grant letter template for each option award — specifying number of options, grant date, exercise price, vesting schedule, and the employee's acknowledgement of the ESOP plan terms.
Merchant Banker FMV certificate coordination (Rule 11UA)
The merchant banker FMV certificate is mandatory at every ESOP exercise — it is a statutory requirement under Rule 3 of the Income Tax Rules, 1962, which explicitly requires a SEBI-registered Merchant Banker. A CA alone cannot sign this certificate. Lekha coordinates the engagement with our empanelled SEBI-registered Merchant Banker, manages the information request, and ensures the certificate is dated before the first grant. MB fee ₹74,999 is paid directly to the Merchant Banker.
ESOP register
An ongoing ESOP register (Google Sheet / Excel) tracking: all grants, vesting status per employee, exercise history, and outstanding options — the document investors ask for in diligence.
Who it's for
Is this right for you?
- ✓
Startups about to make their first key technical or leadership hire who's asking for equity
- ✓
Companies approaching a seed round and needing a clean ESOP pool before investor due diligence
- ✓
Founders who granted informal equity promises to early employees without documentation
- ✓
Companies with an existing informal ESOP that needs to be formalised with proper resolutions
Process
How it works
Hiring plan review
Lekha reviews your next 24-month hiring plan — number of hires by seniority, roles, and expected equity ranges at each level. This determines the pool size you need.
Pool sizing and structure recommendation
Lekha recommends pool size, vesting schedule (typically 4-year/1-year cliff), exercise price approach, and good/bad leaver provisions — tailored to your stage and investor expectations.
Plan documentation
ESOP plan document, board resolution, and shareholder resolution prepared in compliant form. Lekha coordinates signing by all required parties.
Merchant Banker FMV certificate (Rule 11UA)
Every ESOP requires a Rule 3 perquisite FMV certificate from a SEBI-registered Merchant Banker — this is a hard statutory requirement, not optional. Lekha coordinates the engagement, manages the information request, and ensures the certificate is dated before your first grant. You pay the Merchant Banker fee (₹74,999) directly via a separate payment link.
Grant letters and register
Grant letters prepared for the first cohort of employees. ESOP register set up. You take over from here for subsequent grants — with Lekha available for new grant cycles and ESOP refreshes.
Questions
Frequently asked
How large should our ESOP pool be?
For a seed-stage startup approaching investors: 10–15% of the fully diluted share capital is the standard investor expectation. The pool should be created pre-money — meaning it dilutes founders, not the incoming investor. Model your next 24 months of senior hires and their expected grant sizes to determine whether a 10%, 12%, or 15% pool is appropriate for your specific hiring plan.
Do we need a separate ESOP trust?
Not for early-stage companies. Companies Act Section 62(1)(b) allows ESOPs to be issued directly by the company via board and shareholder resolutions. An ESOP trust adds administrative complexity appropriate for Series C+ companies with large employee pools. Lekha's ESOP implementation uses the direct issuance model — simpler, equally compliant, and investor-accepted at seed and Series A.
What is the exercise price and who sets it?
The exercise price is the amount an employee pays to convert options into shares. For tax compliance, it should be at or near the fair market value at the date of grant, established by a SEBI-registered merchant banker under Rule 11UA. Setting the exercise price arbitrarily (e.g., at par value of ₹10/share when the FMV is ₹500) creates a large taxable perquisite for employees at exercise, which defeats the incentive purpose.
What happens to unvested options if an employee leaves?
Unvested options lapse and return to the pool. Vested but unexercised options depend on the plan terms: most Indian startup ESOP plans give departing employees 30–90 days to exercise vested options. Options not exercised in this window also lapse. 'Good leavers' (involuntary termination, disability) typically get a longer exercise window or retention of vested options; 'bad leavers' (resignation, termination for cause) typically lose all unvested options and may have accelerated lapse on vested ones.
Can advisors and consultants receive ESOPs?
Not through the standard Section 62(1)(b) ESOP scheme, which is restricted to employees and directors. For advisors and independent contractors, companies use a separate instrument — sweat equity shares or a direct share purchase at a discounted price with appropriate resolutions. Lekha can design the right structure for advisor equity separately from the employee ESOP.
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