Vesting Schedule

The timeline over which a founder or employee earns their equity, typically over 4 years with a 1-year cliff (nothing until month 12, then monthly thereafter).

Vesting protects all parties. If a co-founder leaves after 6 months, they should not keep 50% of the company. A vesting schedule ensures equity is earned, not given at incorporation.

4-year vest, 1-year cliff. After 12 months: 25% vested. Then 1/48th vests each month for 36 more months. A co-founder who leaves at month 18 keeps only 37.5% of their initial allocation.