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Why we picked it This is the plain-English explainer that says the quiet part out loud: the 4-year schedule with a 1-year cliff exists so a co-founder who walks in month three walks away with nothing, and their unvested shares get reallocated to whoever keeps building. It names the exact standard (12-month cliff, then monthly vesting) without drowning you in legalese, and frames vesting as protection for the team, not a signal of distrust.
Founder vesting: what early-stage founders need to know
From HSBC Innovation Banking by HSBC Innovation Banking 9 min read
- The industry standard is 4-year vesting with a 1-year cliff: cross the cliff and 25% vests at once, then the rest drips monthly.
- A founder who leaves before the cliff forfeits everything, so their shares return to the company instead of dead-weighting your cap table.
- Investors expect to see founder vesting in place; not having it is a red flag at your first raise, so set it before you need to.