The most common vesting schedule by far is 4 year vesting with a 1 year cliff. That means that shares will vest monthly over 4 years, but the first 25% will vest all at once after 1 year.

Vesting Duration

Vesting schedules longer than 4 years allow you to incentivize employees for longer periods, but will make recruiting more difficult because most employees' alternative job offers will have 4 year vesting.

Vesting schedules shorter than 4 years have the opposite problem. It may be easier to attract talent, but you take the risk that the employee may leave earlier than you'd like.

Cliffs

Cliffs are designed to prevent an employee from benefiting from equity grants if they leave within a year. Without a cliff, an employee that's not a great fit can leave after a few months and still retain his or her sliver of equity.

Back-weighted Vesting

A newer invention popularized by Snapchat, back-weighted vesting allows you to put the most meaningful vesting events at the end of the 4 year period, instead of distributing vesting evenly over 4 years. This incentivizes employee's to stick around through all 4 years.

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