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Why we picked it A clean, mechanics-first explainer on why every founder, including you, goes on a 4-year vest with a 1-year cliff. It spells out exactly what the cliff does (leave before month 12, your unvested shares snap back to the company) and why investors will not fund a cap table where founders own their shares outright: unvested founder equity is how they protect the round against one of you walking after the money hits.
Vesting 101: Structuring Equity for Founders and Employees
From Rho by Pia Mikhael 9 min read
- The standard is 4-year vesting with a 1-year cliff: 25 percent vests at month 12, then the rest monthly or quarterly over three years
- A cliff means a founder who quits early walks away with nothing, so the equity returns to the company instead of dead-weighting the cap table
- Investors require founder vesting to keep an investor-ready cap table and lock in long-term commitment, so fully-owned founder shares get flagged in diligence