A S BANKA ADVISORS

“How much equity should I give my CTO?” This is the single most common question founders ask us at A S Banka Advisors Private Limited. After structuring ESOP plans for 50+ Indian startups, we compiled the actual benchmark data into a comprehensive carousel.

Key Takeaways from Our ESOP Benchmark Data

• Pre-Seed/Bootstrapped: Technical co-founders typically receive 5-15%, first CTO hires get 2-5%, and key early employees receive 0.5-1.5% each.
• Seed Stage: CTO hires receive 1.5-3%, VP Engineering 1-2%, and the total ESOP pool sits at 8-12% of fully diluted capital.
• Series A+: CTO grants drop to 0.5-1.5%, VP-level hires to 0.25-0.75%, with total ESOP pools at 10-15% of fully diluted capital.
• The Golden Range: The most common ESOP pool size across all stages is 10% of fully diluted capital. Anything below 7.5% signals you are not serious about talent retention.
• Structure matters more than numbers: 3% via ESOP with Rs 100 exercise price means the employee pays cash upfront for illiquid shares. 2% via Phantom Stock with zero exercise price means pure cash at exit. Same equity intent, completely different outcome.

The 3 ESOP Mistakes to Avoid

1. Granting at face value (Rs 10/share): Tax authorities can reclassify this, creating unexpected tax liability.
2. No vesting cliff: Employees leave at month 3 with equity they have not earned through tenure.
3. No clawback clause: What happens when a vested employee resigns? Without clear terms, you are exposed.

Your Equity Plan Checklist

• Fully diluted cap table updated?
• ESOP pool approved by board and shareholders?
• Registered valuer report for exercise price?
• Individual grant letters with vesting schedule?
• Clawback and acceleration clauses defined?

Download the full ESOP Benchmarks 2026 carousel (PDF)

Want a Custom Equity Plan for Your Team?

Every startup’s equity structure is different. The benchmarks above are a starting point, but your specific situation (stage, industry, team composition, investor expectations) requires a tailored approach.

Schedule a strategy session with our team to build an ESOP plan that attracts top talent without giving away more equity than necessary.