Vesting
A schedule by which founders or employees earn their shares or options over time.
Vesting ensures equity is earned through continued commitment. A common structure is four years with a one-year cliff (nothing vests in year one, then monthly thereafter). Founder reverse vesting protects the cap table if a co-founder leaves early. Investors usually require vesting at funding.
Examples
A co-founder’s shares vest over 4 years with a 1-year cliff. — An early employee forfeits unvested options on leaving.
How it relates to The Startup Foundry
The Team Report and Foundry guidance help founders structure equity so the team is aligned and investable.