Vesting

Definition

The process by which employees gradually earn their stock options over time, designed to keep people from taking the equity and running. It's a four-year golden handcuff that makes quitting feel like leaving money on the table, even when the money is imaginary.

Example Usage

"My vesting schedule says I own 25% of my options after year one and 100% after year four, assuming the company still exists in four years, which statistically it won't."

Related Terms

Intermediate

up-stack

Moving to build or sell products at higher layers of technology infrastructure, typically where margins are better and you're further from commoditized infrastructure. The opposite of down-stack, and usually more profitable.

🚀 Startup / VC

Intermediate

Go-to-Market

The strategy for launching a product to customers, which in startup land typically involves a 90-slide deck, a Slack channel called launch-war-room, and a blog post nobody reads. It's called go-to-market because go-to-three-customers-who-are-your-friends doesn't sound as impressive.

🚀 Startup / VC

Advanced

down dilution

The reduction in ownership percentage when additional shares are issued, especially painful in a down round where new shares are issued at a lower price. Watching your equity stake shrink while your company's value simultaneously decreases.

🚀 Startup / VC

Beginner

Seed Round

The first significant round of funding, where investors plant money in your startup like seeds in a garden, fully expecting that most gardens will produce nothing but weeds and regret. It's typically between $500K and $5M, which is a lot of money for a PowerPoint presentation.

🚀 Startup / VC

Intermediate

operator

A VC or advisor who has actually built and run companies rather than just invested in them from the sidelines. The startup equivalent of a war veteran versus someone who just played Call of Duty.

🚀 Startup / VC

Advanced

carried interest

The VC's cut of investment profits, typically 20% of gains above a certain return threshold. How general partners get rich while limited partners provide the actual money—the ultimate performance fee.

🚀 Startup / VC

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