Article · 12 min read

Vesting explained: schedules, cliffs, acceleration, and types

Carta Free Beginner

Carta administers cap tables for tens of thousands of startups, so this is the canonical reference on how vesting actually mechanically works: the 1-year cliff, monthly vesting after it, and acceleration provisions. Their own data shows 92% of venture-backed companies put founders on vesting, which is the number to quote when a co-founder says 'we trust each other, we don't need this.' We could not fetch it live (Carta blocks automated requests with a 403), but the URL is the durable canonical page.

  • The 1-year cliff means zero equity vests until month 12, then 25% vests in one lump and the remainder vests monthly over the next 3 years.
  • Acceleration clauses (single vs double trigger) decide what happens to unvested shares on an acquisition, worth understanding before you sign a term sheet.
  • 92% of venture-backed startups put founders on vesting, so it is the default expectation, not an edge case you are opting into.

It answers 3 questions

  1. What equity should I offer a technical co-founder vs. an early engineer?
  2. What does co-founder vesting actually mean, and why do I need it even if we trust each other?
  3. How do I split equity and put a vesting schedule in place at incorporation?

Read with it

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  3. Altman's condensed operating manual for founders, including sharp guidance on focus, spending your time on what only you can... playbook.samaltman.com Article · long Startup Playbook Sam Altman
  4. This is the essay to read first, from a YC partner who co-founded Justin.tv/Twitch and has done equal splits across his own... Y Combinator Essay · ~8 minute read How to Split Equity Among Co-Founders Michael Seibel
  5. A free, no-signup calculator that forces you and your co-founder to actually weigh the inputs (idea, roles, who is full time,... Foundrs Tool · ~10 minutes to work through Foundrs Co-Founder Equity Calculator Foundrs
  6. When a term sheet lands and you are tempted to fight over the last point of valuation, this is the essay that reframes the... paulgraham.com Essay · 12 min read The Equity Equation Paul Graham
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