Investors give back valuation gains to founders of start-ups

Investors at India’s top online start-ups, e-commerce marketplaces Flipkart and Snapdeal and taxi aggregator Ola, are incentivizing the founders of these companies with large amounts of stock options, encashment of part of their holdings in secondary share sales and, in some cases, even direct equity rewards. Fearful of a scenario in which these young entrepreneurs may become disillusioned at losing so much of the companies they’ve built, investors are designing a combination of compensation tools to reward them handsomely and avoid distractions, according to shareholders in these start-ups.


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