Before we go on to explain how, the answer is…it depends.
Stock options have become increasingly lucrative for job seekers as a few successful startups have given rise to hundreds of first-generation millionaires in the last couple of decades. But not every job at a startup gives you access to stock options, and not always do you get them with your initial offer.
Chances are, if you are reading this article, you already work at a startup but do not have stock options as part of your compensation. This could be a function of a few things. Your startup is picky about who they award stock options, and you didn’t fall into that bracket when you joined. Or, they stopped giving options after hitting a certain number of employees.
You are much more likely to get stock options if you join a company early. It also helps that the potential upside or profits would be much higher if you joined a successful startup very early, considering the steep increase in valuation and the significantly lower strike/exercise price.
Who can forget Flipkart’s ESOP buyback of $80 million in 2021? Imagine the millionaires it would have minted! Here’s another happy stat: Indian startups far outweigh other Southeast Asian peers when it comes to granting ESOPs, according to a report by Singapore-based VC Saison Capital.
Anyway, back to the question we started with.
Can you ask for stock options having already been around for a while?
The resounding answer: Yes! While there is no one-size-fits-all answer here, there are a few things to help you make a case for ESOPs for yourself.
For one, who gets stock options at your startup? Do others in your team or function have them? Does your manager? How important are you in the scheme of things that the company would want to share a part of their success with you?
In case you are not eligible, find out what it takes and make a dash for it.
If it turns out that you are indeed eligible, it is a good idea to speak to your reporting manager, or someone from the Human Resource team.
Here’s an example of an argument you could use in such a scenario:
“I believe being an owner via ESOPs will not only align my personal financial goals with those of the company, but also give me a deeper sense of accountability in our shared success. As someone who is confident in the future success of the company, I’d love to be a part of it. Having the opportunity to grow alongside the company will obviously mean a far greater sense of ownership, and keep me invested for the long term and for the right reasons.”
Remember to pepper in how your contributions have benefitted the company, and why they should consider you valuable enough to retain you for the long game. Numbers never lie!
If it's feasible for you financially, consider requesting a portion of your upcoming appraisal as stock options instead of cash. Doing so can communicate to founders that you have genuine faith in their vision and mission and you plan to be around for the long-term.
Don’t hesitate! Asking for stock options is a good thing and shows that you want to stay invested in the company’s long-term growth.