Startup Equity Should Always Have a Vesting Schedule

Startup equity should 𝗮𝗹𝘄𝗮𝘆𝘀 have a vesting schedule - but how long?

Yes, that "always" above applies to advisors, independent board members, employees, and even founder shares. Everyone should have a vesting schedule!

We all know that the typical employee vesting schedule is a 4-year grant with a 1-year cliff (which means the employee needs to stay for a full year in order to vest any options).

It's a little different for advisors (blue bubbles) and ind. board members (black bubbles).

𝗔𝗱𝘃𝗶𝘀𝗼𝗿𝘀

• The median is a 2 year grant, with no cliff.

• The distribution is much more dispersed in Series A and beyond, but early advisors tend to either get a 2 year vesting schedule or a 4 year vesting schedule

• Some advisors are granted equity on performance criteria instead of time - this can be tricky!

𝗜𝗻𝗱. 𝗕𝗼𝗮𝗿𝗱 𝗠𝗲𝗺𝗯𝗲𝗿𝘀

• Median grant has a 4-year vesting schedule, no cliff.

• Seems to be a bit more "all over the place" than advisor grants, but the 4-year period is by far the most common

𝗞𝗲𝘆 𝘁𝗮𝗸𝗲𝗮𝘄𝗮𝘆 Do not grant equity without a vesting schedule to anyone involved with your company. Vesting schedules align incentives!

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