Definition
A schedule requiring founders to earn their equity over time, typically 4 years with a 1-year cliff. The investor-imposed acknowledgment that founding a company doesn't mean you'll stick around to build it.
Example Usage
Our founder vesting agreement meant if either of us left in the first year, we'd forfeit all equity—a mutual commitment mechanism.
Origin
Employee stock option practices adapted for founders in the 1990s
Fun Fact
Founder vesting seems unfair—they literally founded the company—but protects everyone from the co-founder who bounces after six months with 50% of the equity.
Source: Startup equity structuring and founder agreements
Related Terms
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See “founder vesting” in Corporate Speak, Gen-Z Slang, Pirate Speak, and more.
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