A vesting schedule is the time-based or milestone-based framework under which founders, employees, and advisors earn their equity over time, rather than receiving it all upfront. Vesting protects the company (and remaining shareholders) by ensuring that those who depart early forfeit unearned equity — a foundational structural protection without which a co-founder leaving in month six could walk away with a quarter of the company’s equity, devastating subsequent fundraising and team morale.
The market-standard vesting structure for venture-backed companies is four-year vesting with a one-year cliff: zero equity vests during the first 12 months; on the cliff date, 25% vests in a single grant; the remaining 75% vests in equal monthly increments over the subsequent 36 months. This structure was popularized by U.S. VC and is now the global default for startup equity. Variations include 5-year vesting (common for advisors/board), 3-year vesting (common for executives in distressed companies), and milestone-based vesting tied to performance triggers.
For founder vesting, the negotiation typically involves: (i) retroactive credit for time worked prior to the financing (e.g., a founder who has been building for 18 months pre-financing may negotiate immediate vesting of 18/48ths of their equity); (ii) single-trigger acceleration on change of control (rare and investor-disfavored); and (iii) double-trigger acceleration requiring both a change of control AND involuntary termination within a defined window (12–24 months post-CoC) — the market-standard founder protection. Double-trigger ensures founders are not stranded with unvested equity after an exit and continued service is no longer possible.
For employee vesting, vesting integrates with the option grant: options vest on the schedule but require exercise (and payment of the strike price) to convert into shares. Early exercise provisions allow employees to exercise unvested options (subject to repurchase right on departure), enabling 83(b) elections that fix the tax basis at grant — a meaningful long-term capital-gains optimization for U.S.-taxpayer employees joining at low valuations.
For Turkish founders structuring international VC rounds, vesting is implemented either through founder restricted stock in the Delaware top-co (with reverse-vesting repurchase rights) or through the Turkish subsidiary’s share structure. Vircon Legal advises founders on vesting architecture — schedule selection, retroactive credit negotiation, single/double-trigger acceleration scope, repurchase-right mechanics for departing founders, and the coordination of Delaware vesting with Turkish-side employment, tax, and corporate-law considerations.