Cliff

Also called: vesting cliff, one-year cliff, 1 year cliff, one year cliff, cliff vesting

The first stretch of a vesting schedule, during which nothing vests. A person who leaves before the cliff keeps no shares. A person who stays past it receives that first portion at once.

For example: An employee has options that vest over four years with a one-year cliff. Leaving in month 10 means keeping none. On the first anniversary, a quarter vests in one step.

Connects to 5

Vesting Concept
Stock options Concept
Equity Concept
Advisor shares Concept
83(b) election Concept

This glossary is plain-language orientation, not legal or financial advice. Before you decide on a company structure, a contract, taxes or a fundraising deal, talk with a lawyer or an accountant.