Vesting Cliff
A minimum period, typically one year, that must pass before any equity vests at all under a vesting schedule.
A cliff is the initial waiting period in a vesting schedule during which no shares vest at all; if the person leaves before the cliff, they walk away with nothing from that grant. Once the cliff passes, a lump sum of shares (usually 25% for a standard four-year schedule) vests immediately, and the remainder vests monthly or quarterly thereafter.
The standard one-year cliff exists to protect the company from a new hire or co-founder who leaves within the first few months, since equity that vested from day one would let someone earn meaningful ownership for a very short tenure.
An employee is granted 40,000 options on a standard four-year schedule with a one-year cliff. If they leave after eight months, they vest nothing; if they leave after fourteen months, they've vested 25% (10,000 shares) at the twelve-month mark, plus roughly two more months of monthly vesting.
A one-year cliff is standard and worth holding firm on for every grant, including founders — the rare cases of no-cliff or short-cliff grants tend to be reserved for very senior late-stage hires with unusual negotiating leverage.
What happens to equity if someone leaves before the cliff?
They forfeit the entire unvested grant — nothing vests until the cliff date is reached, which is the whole point of the cliff as a retention mechanism.
Related terms
Run the numbers yourself: dilution, SAFE conversion, and fund-returner calculators.