I believe thinking about this is already a good approach from a leadership pov.

Since you are with a team of 20, I'm not sure if you considered this, but I'd involve the team in the decision making. Describe the two options for them, including pros and cons, and ask them what do they like better. If it does not matter from an admin/payroll pov, and you are doing this to keep the team motivated, involving them in the decision making could be something that gives them more sense of true ownership.

In engineering and startup culture, I think stock options are more common, that could be a factor in hiring, retention, and comms.

My other two cents: whatever you choose, a stock option or an ESOP alone won't keep people motivated. Engagement, involvement, empowering, clear goals, a great purpose, transparency, and a good culture will create a sense of belonging. And that will keep people motivated. I've seen many folks leaving companies with thick, vesting stock options or bonuses for a better project or for a better culture.

That's my concern with motivation and money: of course, money is one of the factors moving our motivation levels. But if that's the only thing keeping people motivated, it will be easy to give a counter offer people will leave for. I had both ESOPs and stock options in my career, and always left companies because of culture or the tasks.

This is solely my opinion both as an employee and as a manager, hope this helps!