Also called: Equity vesting, Vesting schedule
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.
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.
Investors check vesting in diligence; the deck rarely mentions it directly.
Vesting shows up most often in these scoring rubrics and investor profiles, jump straight to who cares about it and how to pitch them.
A vesting feature where no equity vests until a specified milestone (typically 1 year of service), then a chunk vests at once.
A vesting schedule applied to founder equity, typically required by VC investors to align founders with the long-term outcome.
A vesting acceleration provision where unvested equity vests automatically on a single triggering event, typically a change of control.
A vesting acceleration provision requiring two events, typically a change of control AND involuntary termination, before unvested equity vests.
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.
Long-form deep dives on the slides Vesting most often shows up on.
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