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.

Related terms

ESOP Cap Table
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