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0 pointsbipson5y ago0 comments

Potential worth != real money in the bank.

Also, seen from the other side: They made a contract offering 40% in four years (conditionally) - most importantly only relevant when the company/idea survive that long and are thus profitable/worth something. Why should they suddenly pay this (or a meaningful fraction?) out after one year? Or give an "outsider" 40%, which will most certainly be difficult to explain to future investors?

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2 comments · 1 top-level

mijoharas5y ago· 1 in thread

a standard vesting schedules is 4 years with a one year cliff. That means that after one year the person will have vested options worth 10% of the company. they will then accrue more options every month until they've fully vested their 40%.

That doesn't mean they'll only get 40% after 4 years.

jacquesm5y ago

And typically when you are terminated without cause a good vesting contract will foresee in that and trigger the 'accelerated vesting' portion of the contract. Ditto with an early sale and possibly other trigger conditions.

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