Definition
Vesting means equity is earned on a schedule, often with a one-year cliff and monthly vesting after that. If a cofounder or employee leaves early, unvested shares return to the company. It protects the people who stay from people who leave with a full grant.
In the room
How the word shows up in a real conversation.
A cofounder has 20% with a four-year vest and a one-year cliff. They leave at month ten. None of the 20% has vested. The company can reallocate that equity to the people still building.
Formula
Typical founder vest: 4 years, 1-year cliff, then monthly
Common mistake
Skipping vesting “because we trust each other.” Trust is not a cap-table policy. Vesting is how you stay friends if someone leaves.
See also
Cap table
The ledger of who owns the company: shares, options, and what converts later.
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Dilution
The drop in your ownership percentage when the company issues new shares.
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Employee stock option plan (ESOP)
Program that gives employees the right to purchase company stock at a set price.
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SAFE
A YC-style agreement to invest now and receive equity later, usually at a priced round.
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