Redbus was sold a while back, however @mint broke a story about how the employees and senior management felt shortchanged. As is the case with @mint the story was pretty much balanced with the founders, employees, external experts POV and left it to everyone’s interpretation.

As is the won’t these days David vs Goliath assumed historical and hysterical proportion on Twitter with many an assumptions of

1. How this will effect the ecosystem of startups?
2. How this is wrong in spirit?
3. Why this should not have happened?
4. Why xyz is to blame and others not? so on and forth.

I did get into a small debate with @nixxin and @deepakshenoy about the same; whilst everyone was speaking similar things from a different perspective, I thought this was an good opportunity to specifically jot down thoughts:

REDBUS ARTICLE…. read it here

Some basic questions like:

A person who joined 8 months ago for product, from google — because of ESOPs? — offered a huge hike and promoted to COO, accepts and later finds that he has been short changed.

Other seniors who had ESOPs or similar did not understand or read that correctly and relied on the founder but felt let down.

The ESOPs vestment and release etc were legal and binding.

The sale was from a private company to a private company, no IPO in the near future also, hence in all probability the ESOPs would remain piece of paper.

In the spirit of things or morally, should the founder/s spoken about this, assured, laid cards open — YES. Could he/they have done it, Maybe, maybe not given the purchasers initial offer document. And that is the sad truth.

As many made a very general & grandiose statements that this would effect the ‘Startup Eco System’ my response is BULL. There have been many such instances in the past, current and future; it is just that thanks to social media everybody has an opinion and we are free to thrash based on assumptions.

Some random thoughts that may be relevant for employees/entrepreneurs and the startup eco system also.

1. ‘Taking a drop in Salary and joining’ because hefty payout later looks good on your tweets & to peer group after a couple of beers. It is like buying a lottery ticket.
2. ‘Hefty Payout’ needs to be defined and documented qualitatively and quantitatively, with ‘or’ timelines etc clear to both parties.
3. Trust is good. But as I keep advising, in the corporate world Trust, but verify. This means get your own lawyer/CA/friend to verify and confirm your interests.
4. Do not be afraid to push for a mid term review and re negotiate; startups keep pivoting, there is no reason you should not.
5. If you are in the lower, middle management or functional support roles, opt for PLB (Performance linked bonus) paid out quarterly/yearly. More chances of getting it, maybe a bit less than the elusive ‘Jackpot’.
6. Talk, Share, Learn when you network. Ask others, how differently ESOPs are structured.
7. There are too many variables that affect a startup in India — Founders, partners, VC/PE Investors, Buy out Investors and most of them are interested in the 5x 15x returns rather than worry about ESOPs payout.
8. Online business going to the market is remote in India, so how will the ‘valuation’ be unlocked given point no 7.
9. REMEMBER — If it looks too good; there is always a catch somewhere.