Equity Cliff

Definition

The date when an employee's stock vesting accelerates, usually one year after they're granted options, when they finally own some shares (until they leave and lose the rest).

Example Usage

My one-year cliff is in March, and I'll finally own 25% of my granted equity, meaning I won't completely lose everything if I quit next week.

Origin

Startup compensation terminology

Fun Fact

Employees who join before the cliff vests and then get fired have been known to lose millions in potential equity

Source: Startup Compensation Standards, equity incentive terminology

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