How Southeast Asian startups use ESOPs to their advantage

I have a friend who recently found herself at a crossroad: After leaving her previous workplace, she received replies to her application from two potential employers.

Company A was an MNC that offered a pretty cushiony paycheck, while company B, a fast-growing startup, quoted a much lower pay (especially for her qualifications). But it came with something different: an employee stock option plan (ESOP).

Given that we come from Asian families who emphasize practicality over passion and predictability over an adventure – plus the prevalent belief that our 20s and 30s are prime periods for building up financial security – my initial reaction (if I were in her shoes) would be to accept the job that helps me pay the bills more easily. She chose the other option, however.

My friend’s reasoning? Company B’s mission deeply resonated with her, and she believed in its growth potential and hence that the ESOP had value. For her, it matters way more to truly make an impact than to just increase the numbers in her bank account. How inspiring is that?

Photo credit: Unsplash

Using ESOP to supplement employees’ remuneration packages has been a hotly debated topic, especially in Southeast Asia. But for many early-stage startups where cash flow is limited and recruiting top talents is the key to growth, ESOPs are a viable alternative to attract, motivate, and retain employees.

My friend is not alone in choosing one over a higher pay; many tech talents are willing to accept ESOPs in place of a higher salary or bonus because they understand that startups take time to grow, and they are eager to be directly involved in building value for the business.

But on the other side of the table, implementing ESOPs is not as easy as it seems for early-stage Southeast Asian startup founders. How exactly do you come up with a solid ESOP structure to attract and keep talents? Is there an ESOP culture in Southeast Asia in the first place? And if so, what is it like? How much equity are investors comfortable with issuing as ESOPs? What happens when your startup finally exits?

These are just some of the questions that were asked at our previous Tech in Asia Live workshops on startup exits, term sheets, and cap table management.

So to answer every founder’s questions once and for all, the crew here at Tech in Asia is organizing a workshop dedicated to that oh-so-complicated topic of ESOPs.

Decoding ESOPs in Southeast Asia

Join us on April 29 to make sense of ESOPs, how to structure one, and its implications on shareholder equity with Ravi Ravulaparthi, CEO and co-founder of Qapita.

During the one-hour workshop, you’ll discover:

• The state of ESOP culture in Southeast Asia
• The different types of ESOP models and how to select the right one for your startup
• How to address the challenges of implementing an ESOP in the cap table
• How to make ESOPs count through value proposition, engagement, and liquidity options

Our speaker Ravi Ravulaparthi has seen it all in the startup world. Through his decades of experience working with entrepreneurs, he is a master in capital raising, corporate finance advisory, mergers and acquisitions, principal investments, debt financing, leveraged finance, and corporate strategy. He is currently an angel investor in several startups in the region.

This workshop also includes a Q&A segment where you can ask Ravi anything about ESOPs. The best part? There will also be a take-home worksheet that provides a step-by-step outline on how you can plan your very own ESOP.

Event details

Date: Thursday, April 29, 2021
Time: 4pm to 5pm SGT
Venue: Virtual or in-person

Okay, I’m sold. How do I sign up?

As usual, this Live workshop is complimentary for our lovely Tech in Asia Core and Live subscribers. If you’re one of us, simply RSVP here. And if you’re based in Singapore and would like to join us in person, register here!

Not yet a subscriber? You can purchase a single ticket at US$18.90. However, the more value-for-money option is to subscribe to Tech in Asia Live at just US$59/year. We have a lot of similar events in the pipeline, specially designed to help founders like you navigate the complicated world of building a startup. You’ll also unlock all of our past workshops, meetups, pitch nights, and annual signature conferences.