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Glossary Venture Capital / Term

Vesting

Generally, when something that is promised is delivered and ownership is officially granted to the recipient. For employees, shares generally vest according a predetermined schedule. Vesting effectively means that employees only receive their equity compensation after a period of employment to ensure alignment of interest between the company and the employee. The current market standard for vesting schedules is 4 years with a one-year “cliff”. Typically, this means that 25% of the grant will vest after one year, and the balance will vest in equal monthly installments over the following 36 months.

Permanent link Vesting - Creation date 2020-03-10


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