Deal Terms
Vesting
The schedule by which an employee, founder, or investor earns their equity over time — typically 4 years with a 1-year cliff.
Vesting is the mechanism by which equity ownership is earned over time rather than granted all at once. Standard startup vesting: 4-year total, 1-year cliff (25% vests after 12 months), then monthly thereafter (1/48th per month for the remaining 36 months). Vesting protects companies from early departures walking away with significant equity. Founders should also vest — investors require it to protect against a co-founder leaving in year 1 with a large equity stake. Vesting schedules are triggered at grant date, not hire date. Acceleration provisions can accelerate vesting upon specific events: single-trigger (acquisition) or double-trigger (acquisition + termination). Always know your vesting schedule, cliff date, and acceleration terms before accepting an equity grant.