Deal Terms
Cliff
The minimum tenure required before any equity vests — typically 12 months, after which the cliff amount vests all at once.
A vesting cliff is a threshold that must be reached before any equity begins to vest. The standard cliff is 12 months: an employee who leaves before completing one year receives zero equity. On the 12-month anniversary, the cliff amount (typically 25% of the total grant) vests all at once. After the cliff, vesting continues monthly. The cliff protects companies from early departures walking away with significant equity after a short tenure. For founders, investors typically impose vesting with a cliff on founder shares as a condition of investment — this ensures founders have long-term skin in the game.