Vesting
Also called Cliff and Four-Year Vesting
Earning your equity over time instead of all at once. The standard is four years with a one-year cliff: nothing vests until you have been around a year, then it accrues monthly.
Why it matters
Vesting protects the company and the remaining founders if someone leaves early. Founders should vest too, investors expect it, and a co-founder without vesting is a risk that can sink a company if the partnership breaks.
For example
A co-founder's equity vests over four years with a one-year cliff, so if they leave after eight months they walk away with nothing.
Go deeper
Related terms
Also in Starting Up
See how founders actually handle this on Raising your first round, part of the Starting Up hub.
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