Cliff

Définition

A cliff is the initial period of a vesting schedule during which no equity vests; if the person leaves before the cliff, they keep nothing. The standard is one year.

Comment cela se présente dans le financement

The classic startup grant is four-year vesting with a one-year cliff: 25 percent vests at month 12, then monthly thereafter.

Questions fréquemment posées

Why do cliffs exist?

They protect the company from giving permanent equity to people who leave quickly, keeping the cap table clean of short tenures.

Do founders have cliffs too?

Investors expect founder vesting with a cliff, which also protects co-founders from each other if someone exits early.

Mettez ce terme en pratique

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