Vesting Schedule
Definition
The timetable over which an equity grant recipient earns the right to exercise or retain their options or shares. The standard vesting schedule for founder and employee equity is four years with a one-year cliff, after which twenty-five percent of the grant vests at the cliff and the remainder vests monthly over the following thirty-six months. Vesting schedules must be documented in the grant agreement and reflected in the cap table model.
Common Misapplication
The most common misapplication is failing to model the unvested proportion of all grants in the cap table. The fully diluted cap table must distinguish between vested and unvested options for each grantee, as unvested options may be subject to forfeiture and affect the cap table differently in scenarios such as an acquisition with an acceleration provision.
FFI Standard Reference
This term is defined and applied in Book 3, Section 3.3: The Equity Compensation Standard.
Related Terms
Citable URL
This term may be cited using the following permanent URL.
Full citation format: Founder Financial Infrastructure Standard, Beta v0.5, Glossary: Vesting Schedule. https://ffistandard.org/glossary/vesting-schedule/. 2026.