Vesting Schedule Calculator
Calculate equity vesting with 4-year standard, 1-year cliff, and custom acceleration triggers. Enter values for instant results with step-by-step formulas.
Reviewed by Daniel Agrici, Founder & Lead Developer
Formula
Vested Shares = (Months Worked / Total Months) x Total Shares (after cliff)
Shares vest linearly after the cliff period. Before the cliff, zero shares are vested. At the cliff, all accumulated monthly amounts vest at once. After the cliff, shares vest monthly. Acceleration triggers can instantly vest additional shares upon qualifying events.
Worked Examples
Example 1: Standard 4-Year Vesting After 2 Years
Problem:An employee receives 100,000 shares with standard 4-year vesting, 1-year cliff, and $1.50 share price. They have worked for 24 months.
Solution:Total vesting period: 48 months\nMonthly vesting rate: 100,000 / 48 = 2,083.33 shares/month\nCliff vesting (month 12): 25,000 shares\nAfter 24 months: 24 x 2,083.33 = 50,000 shares vested\nVested value: 50,000 x $1.50 = $75,000\nRemaining: 50,000 shares over 24 months
Result:50,000 shares vested (50%) worth $75,000 | 50,000 unvested over 24 remaining months
Example 2: Double-Trigger Acceleration Scenario
Problem:A VP has 200,000 shares, 4-year vest, 1-year cliff. After 18 months (75,000 vested), company is acquired and VP is terminated.
Solution:Vested at termination: 18/48 x 200,000 = 75,000 shares\nDouble-trigger fires: acquisition + termination\n100% acceleration: all 200,000 shares vest immediately\nAccelerated shares: 200,000 - 75,000 = 125,000 additional shares\nAt $3.00 acquisition price: 200,000 x $3.00 = $600,000 total
Result:All 200,000 shares vest immediately | 125,000 shares accelerated worth $375,000 extra
Frequently Asked Questions
What is equity vesting and why do startups use it?
Equity vesting is the process by which employees or founders earn ownership of their shares over a defined period of time rather than receiving them all at once. Startups use vesting to align incentives between the company and its team members, ensuring that people stay committed for the long term. Without vesting, an employee could receive a large equity grant on day one and immediately leave, taking valuable ownership with them. The standard four-year vesting schedule ensures that value is earned gradually as the employee contributes to company growth. Vesting also protects investors by preventing excessive dilution from short-tenure team members.
What is a one-year cliff and how does it affect vesting?
A one-year cliff means that no shares vest during the first twelve months of employment, and on the first anniversary, one full year of shares (typically 25% of the total grant) vests all at once. After the cliff, remaining shares vest on a monthly basis over the next three years. The cliff protects the company from giving equity to employees who leave within the first year. If an employee departs before the cliff date, they receive zero shares regardless of how many months they worked. This mechanism is nearly universal in startup equity agreements and applies to both founder and employee grants. The cliff creates a strong retention incentive during the critical first year of employment.
How does single-trigger acceleration work for equity vesting?
Single-trigger acceleration means that vesting accelerates upon the occurrence of one specific event, most commonly a change of control such as an acquisition. When triggered, a portion of the unvested shares (typically 25% to 50%) immediately becomes vested. This protects employees in acquisition scenarios where the acquiring company might terminate positions or fundamentally change roles. Single-trigger acceleration is less common than double-trigger because acquirers generally dislike it, as it reduces their retention leverage over key employees. Companies and investors often negotiate single-trigger provisions carefully, as excessive acceleration can reduce the value of an acquisition deal.
How is founder vesting different from employee vesting?
Founder vesting operates on the same basic mechanics but has several important distinctions. Founders typically negotiate credit for time already spent building the company before fundraising, known as vesting credit or a shorter cliff period. Some founders vest over three years instead of four, and their vesting often begins at company formation rather than a later grant date. Investors almost always require founder vesting as a condition of funding, even if founders have been working on the company for years. This prevents a scenario where a co-founder leaves early but retains a large ownership stake. Founder vesting agreements also frequently include provisions for what happens if a founder is fired versus resigning voluntarily.
References
Reviewed by Daniel Agrici, Founder & Lead Developer · Editorial policy