ESOP Alternative for India
All the retention leverage of an ESOP. None of the dilution.
VestPlus is an institutional, mutual fund-backed retention vehicle that delivers real, compounding financial upside to your team while keeping your cap table clean and payout authority strictly under company governance.
The Structural Problem
Why traditional ESOPs fail to retain top talent.
While equity works well for founding executives, traditional ESOPs create substantial friction, mistrust, and tax burdens for broader technical and operational teams.
The Perquisite Tax Trap (Section 17(2))
In India, exercising vested options triggers immediate perquisite tax on the spread between Fair Market Value (FMV) and exercise price. Employees are forced to pay lakhs of rupees in out-of-pocket cash taxes for illiquid, unlisted shares they cannot sell.
The Illiquidity & Delayed Exit Reality
Over 95% of private startups never conduct an IPO or large-scale secondary liquidity program. Employees wait 5 to 10 years holding paper stock certificates that cannot buy a home, fund education, or provide real-world financial security.
Permanent Cap Table & Voting Dilution
Creating and expanding 10–15% ESOP pools permanently dilutes founder ownership, complicates future fundraising rounds, and requires continuous board approvals, valuation certifications, and ROC compliance filings.
Sunk Option Pool Friction on Resignations
When employees resign, managing lapsed options, buyback rights, and cap table cleanups consumes significant legal resources. The company expends immense administrative effort with zero financial recovery.
Feature Matrix
VestPlus vs. Traditional ESOPs vs. Cash Bonuses
Target Audience
Built for companies that want wealth creation without dilution.
Compete directly with tech giants for top engineers and designers without giving away equity too early or creating messy cap tables for future Series B/C investors.
You run a profitable, self-funded business without VC funding. VestPlus lets you reward and lock in senior talent using corporate profits without surrendering equity or control.
Shareholder agreements strictly restrict equity allocation. VestPlus operates entirely outside cap table constraints, requiring zero board resolutions or dilution waivers.
High industry attrition drains profit margins. VestPlus creates a compelling 2-to-4 year compounding milestone anchor that halves turnover among key billable consultants.
Replace paper promises with compounding reality.
Speak with an Aureva Capital advisor to review how VestPlus can complement or replace your existing ESOP scheme.