Your offer PDF has an ESOP schedule you do not understand. Some people treat it like a lottery ticket. Others ignore it completely. Both are wrong — you need a regret-prevention read, not a hype deck.
Words that matter
- Grant: options you are promised.
- Vesting: when they become yours over time.
- Cliff: usually the first chunk (often 1 year) before anything vests.
- Exercise: paying the strike price to turn options into shares.
- Liquidity: when you can actually sell (IPO, acquisition, buyback — not guaranteed).
Tax (verify current rules)
ESOP tax in India can hit at exercise and again at sale, depending on structure and timing. Rules are YMYL-sensitive and change — read your grant letter and get a CA before you exercise with real money. Never exercise just because a teammate did.
ESOP vs higher fixed salary
Prefer cash if you have debt, no emergency fund, or the startup is pre-product with unclear path to liquidity. ESOP is upside on top of a livable fixed — not a reason to accept a salary that keeps you broke AF in Bangalore.
The takeaway
Red flags: no clear strike price, infinite dilution with no refresh grants explained, pressure to exercise on exit with personal loans, or “trust me bro” valuations.