Vesting Schedules: Why Founders Need Them

Vesting schedules protect your startup by ensuring that co-founders and team members earn their equity over time. This prevents early leavers from walking away with unearned shares and helps preserve long-term motivation and alignment.

Why it Matters

Vesting protects the company (and the other founders) from deadweight equity.
Without it, someone can walk away early and still own a chunk of your startup — which kills motivation, spooks investors, and complicates exits.

Founders Checklist

Set this up in your Stock Purchase Agreement or Equity Grant docs:

4-year vesting with a 1-year cliff (the default standard)
Customize for advisors: 2-year vesting, no cliff is common
Define what happens on termination or departure
Include single or double-trigger acceleration if needed
Make sure it's reflected on your cap table and in your data room
File 83(b) elections if issuing restricted stock

Founder Fails

Skipping vesting schedules altogether
Giving advisors too much equity with no vesting
Confusing single- vs. double-trigger acceleration
Not documenting vesting terms clearly in contracts
Forgetting to reflect vesting status in cap table calculations

When to ask for Help

You’re designing vesting terms for the first time
You’re unsure how to treat advisors, part-timers, or contractors
You want to include acceleration clauses correctly
You’re planning to issue equity outside the U.S.
You’re worried about the legal or tax implications of stock grants

Frequently Asked Questions

Q: What’s a 1-year cliff?
A: It means no equity is earned until after one year — a trial period. If a founder leaves before then, they get nothing.

Q: What’s acceleration?
A: Acceleration lets someone vest faster under certain conditions — usually a company sale. Single-trigger means acceleration happens at acquisition. Double-trigger means it happens only if the person is terminated after acquisition.

Q: Do employees get the same vesting terms as founders?
A: Not always. Founders usually vest from the start. Employees may start vesting later, and sometimes with a shorter total duration.