A vesting schedule determines when equity ownership is earned over time, protecting the company if someone leaves early. Standard: 4-year vesting with 1-year cliff. This means: no equity vests in year 1 (cliff), then 25% vests at the 1-year mark, with the remaining 75% vesting monthly (2.08%/month) over years 2-4. If you leave before the cliff, you get nothing. If you leave at 18 months, you keep ~31.25%. Vesting applies to founders, employees, and advisors. Investors require founder vesting to ensure commitment. Accelerated vesting clauses can trigger on acquisition (single trigger) or acquisition + termination (double trigger).
Key Vesting Schedule Takeaways
- Standard: 4-year vesting, 1-year cliff
- No equity before cliff (usually 12 months)
- 25% vests at cliff, then monthly after
- 2.08% per month after cliff (75% ÷ 36 months)
- Leave before cliff = no equity
- Applies to founders, employees, advisors
- Investors require founder vesting
- Single trigger: accelerate on acquisition
- Double trigger: acquisition + termination
- Protects company from early departures
Vesting Schedule Statistics
4 years
standard vesting period
1 year
typical cliff
25%
vests at cliff
2.08%
monthly vesting after cliff
Expert Tips
Negotiate for double-trigger acceleration
Single trigger gives you full vesting on acquisition. Double trigger requires acquisition + termination—more common but less protective
Start founder vesting clocks early
If you've worked on the idea for a year before incorporating, negotiate for credit towards your vesting cliff
Understand exercise windows
After leaving, you typically have 90 days to exercise options. Some companies offer extended windows—negotiate this upfront
Document everything in writing
Vesting terms should be in your employment agreement and stock option grant. Verbal promises mean nothing
Consider early exercise for tax benefits
83(b) elections let you exercise unvested options and pay taxes on lower values. Consult a tax advisor
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