Free tool
Vesting, visualised. Cliff, schedule and pool.
Slide the vesting period and cliff to see when shares vest, what a founder keeps if they leave on a given date, and what an option pool does to founder ownership.
General information about Ontario and Canadian law, not legal advice or an opinion on your situation. Results depend on your facts and documents, so check with a lawyer before you act.
Questions
What is a vesting cliff?
A cliff is the period before any shares vest. With a common four-year schedule and one-year cliff, nothing vests in the first year; at the one-year mark a quarter vests at once, then the rest vests monthly over the next three years.
What happens to unvested shares if a founder leaves?
Usually the company can buy them back, often at a nominal price, under the vesting terms in the shareholder agreement or a separate agreement. The founder keeps what has vested.
How big should an option pool be?
It depends on who you plan to hire before the next round. Investors often ask for the pool to be sized before their money comes in, so it dilutes existing shareholders rather than them.
Read next: How founder vesting worksVesting and IP assignmentStock option plans
This tool gives general information and estimates about Ontario and Canadian law only, not legal, tax or financial advice. Results depend on the exact terms of your documents. Legal services are provided by lawyers licensed by the Law Society of Ontario. See our Terms of Use.