Vesting

Vesting means you do not own the equity you were promised until time passes or milestones are met. A standard startup schedule vests 25% after a one-year cliff and the balance monthly or quarterly over three more years; some plans add performance conditions. Unvested options lapse when you leave, and vested options must be exercised within the window the scheme sets, often 90 days after leaving or up to the exit for friendlier plans. Founders vest too: investors insist on it so that a departing co-founder does not keep a large stake. You meet vesting in every ESOP grant letter, in founder clauses of the shareholders agreement, and in acceleration clauses that speed it up on an acquisition. What it means for you: read the schedule, the exercise window and what happens on termination before you sign, because those three terms decide what the equity is worth.