Vesting Schedule
A vesting schedule is a time-based plan that determines when employees or founders can fully own their shares or stock options in a company. Think of it like a waiting period where people earn their ownership over time, usually over 3-4 years. It's commonly used by startups and venture-backed companies to keep key people committed to the company's long-term success. For example, if someone has a four-year vesting schedule, they might earn 25% of their shares each year. This concept is also sometimes called "equity vesting" or "stock vesting."
Examples in Resumes
Designed and implemented Vesting Schedule programs for early-stage startup employees
Managed Vesting Schedules for a portfolio of 20+ startup companies
Created employee incentive plans including Vesting Schedule and Stock Option arrangements
Typical job title: "Venture Capital Associates"
Also try searching for:
Where to Find Venture Capital Associates
Professional Networks
Industry Resources
Example Interview Questions
Senior Level Questions
Q: How would you structure a vesting schedule for founders in a pre-seed startup?
Expected Answer: Should discuss standard 4-year schedule with 1-year cliff, explain rationale for founder vesting, and mention potential accelerated vesting triggers like company sale.
Q: What are the key considerations when implementing vesting schedules across different countries?
Expected Answer: Should address international tax implications, local labor laws, equity structure differences between countries, and compliance requirements.
Mid Level Questions
Q: What are the common vesting acceleration triggers and why are they important?
Expected Answer: Should explain single and double trigger acceleration, their purpose in retention during acquisitions, and typical scenarios when they apply.
Q: How do you explain vesting schedules to new employees?
Expected Answer: Should demonstrate ability to clearly communicate vesting concepts, timing, and implications in simple terms without technical jargon.
Junior Level Questions
Q: What is a typical vesting schedule and what is a 'cliff'?
Expected Answer: Should explain the standard 4-year vesting period, what a one-year cliff means, and how monthly vesting typically works after the cliff.
Q: Why do companies use vesting schedules?
Expected Answer: Should discuss employee retention, long-term commitment, and protection of company interests as key reasons for implementing vesting schedules.
Experience Level Indicators
Junior (0-2 years)
- Understanding basic vesting concepts
- Ability to explain vesting to employees
- Knowledge of standard vesting terms
- Basic equity compensation concepts
Mid (2-5 years)
- Implementing vesting programs
- Managing equity compensation plans
- Understanding acceleration triggers
- Compliance with regulations
Senior (5+ years)
- Designing custom vesting programs
- International equity planning
- Strategic equity compensation
- Complex vesting arrangements
Red Flags to Watch For
- No understanding of basic equity concepts
- Unfamiliarity with standard vesting terms
- Lack of knowledge about compliance requirements
- Unable to explain vesting in simple terms
Related Terms
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