Unacademy backs off on ESOP changes after backlash
Unacademy just hit pause on its controversial move to shrink the stock option (ESOP) window for ex-employees from 10 years to 30 days.
After a wave of social media pushback and concerns from former staff, the edtech company has suspended these changes for now.
What's happening with ESOPs now?
The board has set up a one-time, 30-day window for ex-employees to exercise their options at a super-low price per share.
But there's a catch: exercising means you'll owe taxes right away, and there's no guarantee you can actually cash out since preference shareholders get paid first.
Why did Unacademy try this?
Co-founder Gaurav Munjal explained the company wanted to keep ESOPs from becoming worthless if an all-stock merger (like with Upgrad) happened.
He apologized for how things played out and mentioned that even his own ESOPs were affected by these terms.
Why does it matter?
This whole episode puts a spotlight on how tricky equity can be in startups—especially during mergers or downturns.
It's a reminder that stock options aren't always as simple or rewarding as they sound, especially when investors have more rights than employees.