Vesting

TL;DR

The schedule by which equity grants are earned over time, typically 4 years with a 1-year cliff for founders, employees, and advisors.

Vesting ties equity ownership to continued service. The standard schedule for founders, employees, and most advisors is 4 years with a 1-year cliff: nothing vests for the first year, then 25% vests on the cliff, and the remaining 75% vests monthly over the following 36 months.

Vesting protects the company (and the team) from a co-founder or early hire walking away with full equity after a few months. It also creates retention pressure as unvested equity grows in value.

Worked example

An engineer joins with a 4-year, 1-year-cliff option grant of 40,000 options. After 12 months, 10,000 vest (cliff). From month 13 onward, 833 options vest each month (40,000 ÷ 48). At 30 months, 30,000 are vested.

Common pitfalls

• Skipping cliffs on early hires and watching them walk after 6 months with full grants.
• Failing to file an 83(b) election within 30 days of restricted stock grants.
• Granting equity without vesting and creating cap-table problems later.

When this shows up in a pitch deck

Investors check vesting in diligence; the deck rarely mentions it directly.

See Vesting in context

Vesting shows up most often in these scoring rubrics and investor profiles — jump straight to who cares about it and how to pitch them.

In VC frameworks

• Antler — pitch deck framework

Related terms

• Cliff — A vesting feature where no equity vests until a specified milestone (typically 1 year of service), then a chunk vests at once.
• Founder Vesting — A vesting schedule applied to founder equity, typically required by VC investors to align founders with the long-term outcome.
• Acceleration (Single Trigger) — A vesting acceleration provision where unvested equity vests automatically on a single triggering event — typically a change of control.
• Acceleration (Double Trigger) — A vesting acceleration provision requiring two events — typically a change of control AND involuntary termination — before unvested equity vests.
• ESOP — Employee Stock Option Plan — the legal structure that lets a company grant options to employees at a defined strike price, governed by board approval and 409A.

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