Frequently Asked Questions

What vesting schedule should I use for my employees?

Most startups use 4-year vesting with a 1-year cliff. Under this schedule, 1/4th of the shares subject to vesting will vest on the first anniversary of the vesting commencement date (this is the 1-year cliff) and then 1/48th of the total shares originally subject to vesting will vest every month after the cliff.  By the end of 48 months, all the stock will have vested.

Usually, the “vesting commencement date” is the date on which the recipient started providing services to the company. Sometimes, if a founder put substantial work into the company before the company was incorporated, the founder will be given some vesting credit by setting the vesting commencement date to an earlier date.

Also popular among startups is 4-year straight line vesting, which means that 1/48th of the total shares originally subject to vesting will vest every month.