What is equity vesting in startups?

What is equity vesting in startups?

Equity vesting in startups refers to the process by which employees earn their shares over time, rather than receiving them all at once.

How does the vesting schedule typically work?

A common vesting schedule is four years with a one-year cliff, meaning you earn 25% of your shares after the first year and the rest monthly thereafter.

What happens if I leave the company before my shares fully vest?

If you leave before your shares are fully vested, you typically forfeit any unvested shares, but you keep the vested ones.

Are there different types of equity compensation?

Yes, there are several types, including stock options, restricted stock units (RSUs), and employee stock purchase plans (ESPPs).

What should I consider before accepting an equity offer?

Consider the company's growth potential, the vesting schedule, tax implications, and how the equity fits into your overall compensation package.