A vesting cliff is the minimum period an employee or founder has to stay at a company before any of their equity grant becomes vested. The standard structure on a four-year vest is a one-year cliff: leave before twelve months and you walk away with zero shares; stay through month twelve and 25% vests at once, with the rest accruing monthly over the following 36 months.
Vesting is the schedule by which a person earns the right to keep their equity. The cliff sits at the front of that schedule. Say an engineer joins on January 1 with a grant of 48,000 options on a four-year vest with a one-year cliff. On December 31 of the same year, 12,000 options (25%) vest in one step. From January 1 of year two onward, 1,000 options vest each month for 36 months until the grant is fully vested.
Two reasons, both financial. First, the cliff filters out hires who don't work out; the company avoids a partially-vested cap-table footprint for someone who left at month nine. Second, it creates a strong twelve-month commitment signal. Without a cliff, an early hire who stayed two months would walk away with 4% of their grant vested and forever sit on the .
Founders themselves usually vest. The standard founder structure is the same (four years, one-year cliff) and is non-negotiable for any institutionally-backed company. The reason is symmetrical: a co-founder who leaves at month six shouldn't keep a third of the company. Many founders skip explicit vesting in the earliest weeks and regret it when an investor demands it as a condition of the seed round; setting it at incorporation is cleaner.
Two acceleration provisions are common in offer letters and stock-purchase agreements. Single-trigger acceleration vests some or all of the remaining grant on a change of control (acquisition). Double-trigger acceleration vests on a change of control plus an involuntary termination within a defined window. Investors prefer double-trigger; founders should negotiate it for senior roles at the seed and Series A stages.