Year in Review: There’s an Esop fable in Startup Inc’s IPO run

Initial public offerings (IPOs) of eight new-age internet companies this year unlocked over Rs 8,500 crore for employees from their outstanding stock options. Impressive as it is, this pales in comparison to the nearly Rs 34,000 crore in wealth amassed by founders and promoters through equity and share options, as revealed in the companies’ red herring prospectuses (RHPs) ahead of the listings.

Data compiled by Longhouse Consulting exclusively for ET highlights the gap in wealth creation between startup founders and their overall staff.

“The question arises whether the four-year Esop playbook is fair or not,” Anshuman Das, CEO of Longhouse Consulting, said. “Companies are taking at least 10-12 years to get built in India… Investors should possibly think about having longer fund cycles, leaving more for the founders and employees… The employees should also aim to stay longer versus making a quick buck within four years,” he added.

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