Supercharge Hiring with ESOPs | Narayan Thammaiah | Accel

“To supercharge hiring with ESOPs, founders should create an ESOP plan for the long haul. They should think rationally and create mental models around ESOPs to find out what works best and what can be done to leverage ESOPs for hiring and retaining the best talent,” says Narayan Thammaiah, a Venture Partner at Accel. “The most ideal way for creating such an ESOP policy is to use modeling tools to have visibility into future-round valuations, and designing the ESOP scheme to resonate with the vision of the startup – in terms of growth and scalability.” 

With over two decades of experience in the world of HR, Narayan brings to the table a strong understanding of people management, best practices of hiring, and leveraging equity grants as a tool for attracting top talent. With Accel Partners, he has worked closely with several startups and helped them design ESOP policies and scale growth using the same. In a webinar with Sanjay Jha of trica equity, Narayan shed light on why and how ESOPs should be used as an efficient tool for hiring. He goes on to say, “Founders should be able to give new hires visibility into how the company will grow in the next few years and constantly communicate on this front. This constant awareness will keep employees motivated, and that can eventually help scale growth.” 

Narayan suggests that the choice of equity grants should be strategic and in line with the startup’s stage. While early-stage startups should primarily focus on ESOPs to attract talent for the long run, post-product-market fit startups and growth-stage startups should consider granting Restricted Stock Units (RSUs) and Stock Appreciation Rights (SARs). “This is because growth-stage startups would have achieved product-market fit, and founders would need to bring in specialists (with expertise on specific domains) to scale the business to the next level. And such senior hires are more likely to be interested in incentivization that will be easy to evaluate and monetize.” 

Watch the entire webinar to learn more about

• Best practices for creating an ESOP policy that scales with your startup
• Granting equity at early-stage, post-product-market fit stage, and growth-stage
• Most efficient ways to drive an ESOP conversation with a prospective senior hire
• Approaching ESOP liquidity & buybacks

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