How to get the deal done without providing an ESOP

An ESOP which means Employee Stock Ownership Plan is an employee – employer program that provides a company’s workforce with a stock ownership in the company. It is usually an added value which is given as part of their remuneration for the job performed.

So here’s how to close a deal with your lead investor without having ESOP as part of it. It is much like minimizing and maximizing impacts and benefits.
In minimizing the impact, you should make that investor lead the round by investing more because generally when the capitalist invests less than the investor, it will drive that investor to ask for an ESOP where if you invest higher than they do, this lowers the impact the ESOP has on their price per share which is a big advantage on your part to close what is left for you.

In maximizing the benefit challenge the investor to lay the cards on what you would be getting for it and see to it that the shares are authorized. See to it that the benefits you’ll be receiving is parallel to what you can get from the service providers, and use the service agreement to make the investor liable overtime.

Source : What To Do If Your Lead investor Asks for ESOP by Jonathan Friedman