Options and restricted stock in a startup are subject to vesting. This is done to associate the rewards of equity ownership with the time and effort put into creating value for the company.
Although vesting schedules can be infinitely flexible in theory, in practice they don’t vary that much. You’ll find that the majority of option plans and restricted stock agreements are identical in meaning and vary slightly with how vesting is structured. Most vesting schedules have the following parameters:
Vesting period. This is the expected period for full vesting. It is typically 4 years (48mos) in the case of
. . . → Read More: Vesting Calculator for Restricted Stock and Stock Options
