Vesting Schedule
/ˈvɛstɪŋ ˈʃɛdjuːl/
A vesting schedule is a timeline that determines when you gain full ownership of shares or options that have been allocated to you, rather than receiving them all at once.
A vesting schedule is a timeline that determines when you gain full ownership of shares or options that have been allocated to you, rather than receiving them all at once.
Companies use a vesting schedule to ensure that founders and employees stay committed to the business for a meaningful period.
It protects the company from someone leaving early but taking a large chunk of equity with them, which could dilute the ownership of people who continue building the business.
Most vesting schedules run over four years, with a common structure being monthly or quarterly vesting after a one-year "cliff".
This means you earn nothing if you leave before the first year, but after that anniversary, you receive the first year's worth of shares, then the rest vest gradually over the remaining three years.
If you leave the company before your vesting schedule completes, you typically forfeit any unvested shares.
The company can then reallocate these shares to other team members or new hires, ensuring equity goes to people actively contributing to the business.
Yes, vesting schedules can include acceleration clauses that speed up the vesting process.
Single-trigger acceleration might occur if the company is acquired, whilst double-trigger acceleration requires both an acquisition and you losing your job, protecting you from being bought out and immediately let go.
With immediate ownership, you own your shares outright from day one and keep them regardless of how long you stay.
A vesting schedule means the company retains the right to buy back unvested shares if you leave early, giving you full ownership only after you've stayed for the complete vesting period.
Absolutely - vesting schedules are negotiable, especially for founding team members.
You might negotiate a shorter vesting period, a smaller cliff, or acceleration provisions depending on your role and the risk you're taking by joining the company.
