A schedule that earns equity over time instead of all at once. Standard is four years with a one-year cliff. Vesting protects the company and remaining founders if someone leaves early. They only keep what they've earned.
Why it matters
Vesting protects everyone. Without it, someone who leaves after a month keeps their full equity stake. With it, equity is earned over time, and departures are clean. Investors expect to see vesting on every cap table, and its absence is a red flag.
How it works
The standard vesting schedule is four years with a one-year cliff. During the first year, nothing vests. On the one-year anniversary, 25% vests at once. After that, the remaining 75% vests monthly (or quarterly) over the next three years. If someone leaves at month 18, they keep about 37.5% of their grant and forfeit the rest. Vesting should apply to everyone, including founders. Some teams use shorter schedules (two or three years) for advisors or contractors, but the four-year standard is what investors expect to see.
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