Mumbai: Urban Company India and the UAE’s largest tech-enabled home services marketplace today open-sourced a specially crafted ESOP policy for the startup ecosystem in collaboration with MyStartupEquity, a cap table, and ESOP management product by LetsVenture.
Urban Company, in collaboration with MyStartupEquity, has developed the open-source ESOP framework, which is available free of cost and can be accessed by one and all. With ESOP implementation generally being a tedious process, Urban Company and MyStartupEquity aim to provide a proper guide through this open-source framework to help startups as well as private companies better structure terms and conditions and roll out ESOPs with the ingrained intention of sharing ownership with employees that eventually leads to wealth creation.
Urban Company worked with MyStartupEquity to make the open-source ESOP framework freely available. This framework can be used and modified by companies or startups while building their ESOP policy. This framework is a legally vetted document and the cornerstone of the policy is having simple vesting terms, a reasonable exercise price on options, and a generous exercise period. The framework also comes with easy-to-use templates for grant and exercise letters.
In the words of Abhiraj Bhal, Co-Founder, Urban Company, “Urban Company has created substantial value for its employees through ESOPs, conducting three secondary sales in less than six years for existing employees worth nearly $8mn. We believe a robust, employee-friendly ESOP program is one of the pivotal pillars in attracting and retaining talent and building team morale. We now want to extend this framework to budding entrepreneurs and lend a helping hand in their entrepreneurial journey.”
Sanjay Jha, Co-founder & CPO, MyStartup Equity said, “Talent is the most important growth driver for a startup. Therefore, it’s not only important to attract top talent but also to retain and reward them and we have seen ESOPs play a very important role here. We are happy to collaborate with Urban Company in developing this ESOP framework which helps startups in India adopt not only an employee-friendly policy but also addresses the interests from the company’s side as well. ”
Urban Company has been a front runner in creating value for its employees through its robust employee stock options policy. In a span of six years, the company has already conducted three secondary share sales giving its employees a benefit of ~$8 M. The Company’s last ESOP secondary sale was held in August 2020, when 180-plus eligible employees participated and each ESOP was valued at INR 110,000. Under the present program too, employees have the option of liquidating their vested ESOPs via employee-friendly terms. These include an exercise price of Re 1, accelerated vesting, a flat 4-year vesting schedule (25% each year), and an infinite hold period to exercise the ESOPs after the employee exits the company.