When founder shares are subject to “vesting”, they are really subject to "reverse vesting" as the founder will be the registered holder of the shares and enjoy all benefits of being a shareholder (including exercising full voting rights) from acquisition of the shares but the shares may be subject to forfeiture in accordance with the terms and conditions that the company establishes in its discretion.
In general, there is an expectation among investors that the founders of UK start-up companies will subject their shares to vesting so that the founders forfeit shares if they leave the company prior to cessation of the vesting period (although sometimes "Bad Leaver" (as further discussed below) may extend beyond the vesting period. The purpose of vesting from an investor's perspective is to keep the founders incentivized to stay with the company and contribute to its success.
The standard vesting schedule in the UK is a monthly vest over 4 years with a 12-month cliff. Meaning, 25% of the shares shall vest on the first anniversary of the vesting commencement date with the remaining shares vesting at a rate of 1/48th of the total shares monthly thereafter. With regard to the vesting commencement date, some investors may allow the founders to establish a vesting commencement date based on when the founder began providing significant services to the company so that he or she can get credit for time already served. Alternatively, some investors may require the shares to "revest" with effect from the date of closing of the investment. As the company becomes more mature, we would expect the proportion of a founder’s shares that is required to revest after a financing round to be reduced.
Upon a founder's departure, the consequences on their shareholding will depend on the categorisation of the departing founder as either (typically) a "Good Leaver" or a "Bad Leaver". Typically, if a "Good Leaver" the unvested shares only will be converted into worthless deferred shares and the founder retains the vested shares but they may lose all voting rights attached to them. If a "Bad Leaver" it is typical for all vested and unvested shares to be converted into worthless deferred shares. The definitions of "Good Leaver" and "Bad Leaver" are often subject to negotiation. "Bad Leaver" events would typically include fraud, gross misconduct and similar bad faith actions with "Good Leaver" typically defined as a departure in any other circumstances.
Learn More: UK Founder Series: Departing Founders and Founder Fallouts