Equity Vesting 101

Vesting is the schedule by which you earn the right to your equity over time. It protects the company (and co-founders) if someone leaves early — they only keep the equity they've vested, not the full grant.

The most common founder and employee vesting schedule: 4-year vesting with a 1-year cliff. • 1-year cliff: You vest 25% of your shares after your first full year. • Monthly thereafter: The remaining 75% vests equally each month over the next 3 years. This means if you leave before year 1, you receive nothing.

Before investing, VCs will review your vesting schedule. Red flags: Founders who are fully vested (no skin in the game), very short vesting periods, or no vesting at all. Investors want founders with long time horizons committed to building. Expect VCs to reset vesting at the time of investment — often re-vesting a portion of your shares on a new 4-year schedule.

Single-trigger acceleration: Shares accelerate upon a specific event (e.g., acquisition). Investors often push back on this. Double-trigger acceleration: Shares accelerate if BOTH a change of control occurs AND you are terminated. This is more balanced and more commonly accepted.

If your company has been operating for 12–18 months before raising, negotiate to get 'credit' for time already served — ask for a shorter remaining vesting period on your initial grant. Always work with a startup lawyer to review vesting terms before signing.