Startup Funding Espresso -- Equity Vesting
Equity Vesting Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Vesting is conveying the ownership of equity to the holder. Vesting schedules show the rate at which equity is vested over time. It is used to ensure founders and employees stay with the company till the proposed milestones are achieved. Investors will look for standard vesting schedules on all equity given to founders, co-founders, and employees.\xa0\xa0 The standard vesting schedule for early-stage companies is a four-year vesting schedule with a one-year cliff for founders and employees. The one-year cliff means the vesting starts after one year but conveys equity each month thereafter. At the end of the first year, the holder receives one-quarter of the equity. Fully vested means that all ownership has been conveyed to the holder.\xa0 For founders and cofounders, the vesting schedules should be the same even if the equity percentages are different. The standard vesting for advisors and directors is 2 years with a 3-month cliff. In some cases, the founders can get double trigger acceleration. This accelerates the vesting if two events happen at the same time such as the founder leaves and the company undergoes an acquisition. Vesting is a key concept in equity that founders should understand. \xa0 Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. Let\u2019s go startup something today. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: \xa0 Check out our other podcasts here: \xa0 For Investors check out: \xa0 For Startups check out: \xa0 For eGuides check out: \xa0 For upcoming Events, check out \xa0\xa0 For Feedback please contact info@tencapital.group\xa0\xa0\xa0 Please , share, and leave a review. Music courtesy of .