Should I take the ESOP option with a start-up?
The rise in self employed people and start-ups has resulted in employee stock options (ESOPs) doing the rounds. For start-ups, compensation by way of cash and ESOPs is far more convenient than paying market rate salaries. The success stories of startups seeking funding and making money is also a big lure for one to consider such compensation. For many, the tales about Infosys doling out ESOPs and turning several employees into millionaires is now history, but it is also an example of ESOPs working out. If you can risk being compensated with ESOPs and see the upside of taking the risk, go for it. At the same time, be fully aware that your ESOPs may not always turn you into a millionaire. Most importantly, take up the offer if it interests you and not for the prospect of making money in the future.