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What is Stock Vesting & What it Means for Employee Stock Options | Carta

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Over the next three years, an cliff period stock options four shares will vest every month. They do not want to lose their employees immediately after the cliff date, where they can take cliff period stock options shares and leave. What is a cliff in a vesting schedule? Definition Vesting schedules can have a cliff designating a length of time that a person must work before they vest at all. A vested benefit is an incentive that employers can offer their employees. It is especially uncertain when signing on to a startup. Reasons to Consider Using Cliff Vesting One of the most exciting aspects of joining a startup as an employee is getting stock options. At this point, the employee would be fully-vested. And it can happen that companies reserve the right to repurchase vested shares in certain events. The reason being is because many startup companies tend to fail within the first three years.



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