Choosing a vesting period: 25% per year or 1/36th per month?


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How should we structure the vesting period for the options pool? Is there an industry standard that founders follow (and employees expect)? The most common ones seem to be either 25%/year or 1/36th a month.

Vesting

asked Feb 13 '14 at 16:13
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Dominick Thomas
56 points

1 Answer


2

1/36th a month is a better practice -- it prevents there being a trigger for employees to reconsider their employment after a big chunk of their equity vests, or worse, someone who's decided to leave half-assing for several months while they wait to hit their next big milestone. Many startups do 1-year vesting, then monthly thereafter.

There was a great article about this by a VC that I can't find right now. If I see it again, I'll update with a link.

answered Feb 13 '14 at 19:59
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Jay Neely
6,050 points

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