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    Deal Terms & Legal
    Entry
    Global · Global

    Vesting

    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.

    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.

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