Founder Vesting Cliff

An initial period (commonly one year) during which no founder or employee equity vests.

A cliff means that if someone leaves before completing the cliff period, they receive no equity at all; after it, a chunk vests and the rest accrues over time. Cliffs protect the company and remaining founders from early departures leaving with significant equity.

Examples

A co-founder who leaves at month 11 forfeits all shares due to a one-year cliff. — A new hire vests 25% after their first-year cliff.

How it relates to The Startup Foundry

Sensible equity structures keep your cap table clean and your team aligned — qualities investors back.

Related terms

Back to the glossary