Cliff

A Cliff is a term used to describe the length of time it takes for stock options or other securities on a vesting schedule to partially or fully vest.

Example:

A typical vesting schedule for a startup is monthly over 4 years, with a one-year cliff. This means that the recipient of the equity will receive nothing for the first year, then 25% after the first year, and then the remaining 75% will vest monthly over 36 months.

Employment Contract Considerations for Small Businesses and Startups

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