A cofounder vesting schedule means you earn your equity over time instead of owning it all on day one. The standard is four years with a one-year cliff: nothing vests for 12 months, then 25% vests at once, and the remaining 75% vests monthly over the next three years (Startups.com). You split equity once. You earn it over four years.
What does vesting actually do?
It decides when your ownership becomes real. The split says who owns what on paper. Until shares vest, the company can buy them back if you leave.
A co-founder who quits in month eight should not walk away with half the company. Vesting turns a handshake into a schedule, and the schedule does the enforcing so neither of you has to.
What is a vesting cliff?
The first 12 months, during which nothing vests. Leave on day 364 and you keep nothing. Stay past day 365 and your first quarter is yours (Startups.com).
The cliff stops someone who leaves early from taking real ownership before they have contributed much (Carta). It protects each of you from the other. If your partner disappears in month three, you do not want to raise a seed round while they still own a third of the cap table.
Treat the first year as the trial you both agreed to. Twelve months is long enough to learn whether you work well together and short enough that walking away costs no equity.
How does a 4-year, 1-year-cliff schedule vest?
Say a cofounder holds 4,000,000 shares.
| Milestone | What vests | Total vested |
|---|---|---|
| Months 0 to 11 | Nothing | 0% |
| Month 12 | 25% at once | 1,000,000 (25%) |
| Months 13 to 48 | 1/48th of the grant each month | 75% more over 36 months |
| Month 48 | The last monthly slice | 4,000,000 (100%) |
The same 1/48th vests each month after the cliff until the grant is complete (Capbase). Investors at Series A generally expect founders to still have part of their shares unvested, so the schedule keeps running as you grow.
What happens to unvested shares when a cofounder leaves?
The leaver keeps what has vested. The company buys back the rest or returns it to the option pool, often within a window such as 90 days after departure (Capbase). The board usually decides on the buyback, which is where good-leaver and bad-leaver terms matter.
All of this is settled by what you wrote down before anyone left. For the full picture, read what happens to equity when a cofounder leaves.
What is acceleration?
Early vesting, usually on an acquisition. Single-trigger vests everything when the company is sold. Double-trigger vests only if the sale happens and the founder is fired or pushed into a smaller role within roughly a year. Investors prefer double-trigger because it causes less friction in a financing or sale (Capbase). The details are in vesting acceleration explained.
Decide which one you want before a term sheet arrives. Then put vesting into your cofounder agreement next to roles, decision rights and IP assignment, and check it matches the split you agreed in how to split cofounder equity. Our template library includes a founder vesting agreement you can start from.
Frequently asked questions
- What is a standard cofounder vesting schedule?
- Four years with a one-year cliff. Nothing vests in the first 12 months. At the one-year mark 25 percent vests at once, and the remaining 75 percent vests monthly over the next three years. This is what most investors expect to see on a startup's cap table when founders raise money.
- What is a vesting cliff?
- A cliff is a waiting period before any equity vests, usually one year. A cofounder who leaves before the cliff date keeps nothing. It stops someone who exits in the first months from leaving with real ownership, and it gives the founders a year to learn whether they work well together.
- Should founders put themselves on a vesting schedule?
- Yes. Founder vesting protects each cofounder from the others. If one partner quits in month eight, their unvested shares go back to the company instead of leaving with them. Investors also expect founders to still be vesting when they raise a Series A, so setting it up early saves a negotiation later.
- What happens to unvested shares when a cofounder leaves?
- The departing cofounder keeps only the vested part. The company usually buys back the unvested shares or returns them to the option pool, often within a set window such as 90 days after the founder leaves. What the agreement says about good and bad leavers decides the details, so write it down early.