ESOPs Explained: What You Must Know Before Joining a Startup
Welcome to Episode 5 of our Startup Series! Today, we’re breaking down one of the most misunderstood but most important topics in the startup world: ESOPs (Employee Stock Option Plans). Most employees hear “We’ll give you stock options” in an interview… …but very few actually understand what that means, how vesting vs. exercise works, or how to evaluate whether the ESOP offer is even valuable. In this video, Asad Siddiqui simplifies ESOPs with real examples, clear breakdowns, and a practical checklist every job seeker and startup employee must know. 🚀 What You’ll Learn in This Video What exactly an ESOP is (in the simplest language possible) Why startups use ESOPs and how they motivate employees How vesting works (4-year vesting, 1-year cliff explained) Vesting vs. Exercise – the critical difference employees miss Why ESOPs can become life-changing wealth Real examples from Nvidia employees The 6 questions you MUST ask when you’re offered ESOPs in an interview How to know if your ESOP offer actually has value This is your ultimate ESOP Masterclass, simplified for first-time professionals and aspiring startup founders. 🕒 Timestamps 00:00 – Why every startup loves offering ESOPs 00:20 – What is an ESOP? Explained in simple language 00:36 – How ESOPs create wealth when companies grow 00:59 – Why startups offer ESOPs instead of high salaries 01:17 – How vesting works in ESOPs 01:38 – 4-year vesting, 1-year cliff breakdown 02:00 – What happens if you leave before the cliff 02:20 – If you leave after 2 years, how many shares you keep 02:40 – Why most first-timers underestimate ESOPs 03:05 – Real examples from Nvidia employees who became millionaires 03:28 – The truth: not every startup becomes Nvidia 03:46 – The 6 questions you MUST ask when someone offers you ESOPs 04:04 – Vesting vs. Exercise – the difference no one explains 04:23 – What is the exercise price and why it matters 04:40 – What happens to ESOPs during acquisition or if you leave early 04:59 – Complete recap of everything you need to know about ESOPs 05:21 – The next time someone offers ESOPs… you’ll know what to ask 05:39 – What’s coming next: Cash Burn Rate & Cash Runway 💼 About This Startup Series This is Episode 5 in our ongoing series where we simplify everything young founders, job seekers, and startup employees must know — from What is a Startup, to Fundraising Rounds, SAFE Notes, Cap Table, and now ESOPs. If you're serious about working in startups or building one, these videos will help you understand the fundamentals the right way. 🎙️ About the Host – Asad Siddiqui Asad Siddiqui is the creator of Finance Insider, where he simplifies business, finance, and startup knowledge for young professionals. Follow for more clear, practical breakdowns of topics founders wish they learned earlier. 📢 Support the Channel 👍 Like the video 📝 Comment your favourite learning 🔔 Subscribe for Episode 6: Cash Burn Rate & Runway #esops #startupseries #startupjobs #equity #compensation #startupindia #financeinsider #asadsiddiqui #employeeequity #vesting #startupeducation #founders #businesseducation
