You, Mr. or Ms. Startup Founder, have already learned that you need to vest founders’ stock and you’ve learned that you need to decide now just how much ownership each founder is going to have in your new company. You’ve also gained an understanding of how the vesting is implemented.
So what’s a standard vesting schedule for founders’ stock?
One standard vesting schedule is termed “Four Years with a One Year Cliff.”
Four Years is the total time period for vesting, and the “One Year Cliff” means that no stock will vest until one year has passed since the stock’s issuance to the founder. Because the one year cliff is 25% of the total vesting period, 25% of the founder’s stock will vest at that one year point. The rest will vest in equal amounts over the final three years, usually monthly at 1/48th of the total amount of stock.
Got it?
