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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