ESOP and sweat equity

"Sweat Equity" is not a defined term. It is simply a colloquial expression implying that one's ownership interest in a company derived not from paying for it (as it would with an investor), or even founding it (as it would with a founder), but rather that the company gave you an increasing ownership interest in exchange for ongoing work that you put in. On the other hand, an "ESOP" is a legally defined term. It stands for an Employee Stock Option (or Ownership) Plan. That is the mechanism by which employees of a company are compensated with increasing equity interests over time. An ESOP typically sets aside a certain percentage of the ownership of the company (say, 10-15% of the stock), and when each employee is hired, he or she is granted Options to purchase a particular number of shares. An "option" is exactly that: the right, but not the obligation, to buy shares at the current fair market value of the company.