How Vesting Works
Equity vesting is the process by which you earn ownership of shares (or options) granted by your employer over time. Almost every tech compensation package includes some equity, and almost every grant comes with a vesting schedule attached. The schedule protects employers from giving away shares to people who leave in a few months, and protects employees by guaranteeing the equity will be theirs if they stay.
The standard schedule in tech is four-year vesting with a one-year cliff, monthly thereafter. This means you earn zero shares for the first 12 months. On your one-year anniversary, 25% of your grant vests at once. The remaining 75% vests in equal monthly chunks — one forty-eighth of the total grant per month — over the next 36 months. Some companies vest quarterly or annually instead.
Common Vesting Schedules
| Schedule | Pattern | When you see it |
|---|---|---|
| 4 yr / 1 yr cliff / monthly | 0% for 12 months, then 25% vests, then 1/48 monthly | Most tech startups and many big tech companies |
| 4 yr / 1 yr cliff / quarterly | 0% for 12 months, then 25%, then ~6.25% per quarter | Common at large public tech companies |
| 4 yr / no cliff / monthly | ~2.08% per month from month 1 | Sometimes given to early employees as a perk |
| 4 yr back-loaded (5/15/40/40) | 5% year 1, 15% year 2, 40% year 3, 40% year 4 | Some big tech companies (encourages longer tenure) |
| 4 yr front-loaded (40/30/20/10) | 40% year 1, 30% year 2, 20% year 3, 10% year 4 | Rare, considered very employee-friendly |
| 3 yr / 1 yr cliff | 0% for 12 months, then 33%, then 1/36 monthly | Newer schedule at some big tech companies |
The Cliff Is the Most Important Date
If you're planning to leave a company that has cliff-based vesting, the date of the cliff matters more than almost any other date. Leaving the day before the cliff means you forfeit everything you've earned so far. Leaving the day after means you walk away with 25% of your grant already vested.
If you're considering an offer with a one-year cliff, model out the worst case: what if you join and the role turns out to be wrong? You would commit to 12 months for any equity at all. That's a real cost. The calculator above can help you visualize the timeline before you sign.
Refresh Grants (The Hidden Part of Tech Comp)
A vesting schedule only tells you about your original grant. What it doesn't tell you is what happens after year 4, when you're fully vested and your remaining equity from this grant is zero. At most big tech companies, you'd receive annual "refresh" or "refresher" grants long before that point — new equity awards layered on top of your existing one.
Most startups do not have formal refresh programs and only give new equity at significant life events: promotion, hitting a major retention milestone, or as part of a counter-offer when you have another offer in hand. If you're evaluating a startup offer, ask explicitly: "What does the equity refresh cadence look like for senior engineers two and three years in?" The answer reveals a lot about how the company thinks about long-term comp.
Equity Calculator: What's It Worth Today?
For RSUs at a public company, the math is simple: vested shares times current stock price equals the dollar value of what you own. For stock options at a public company, subtract the strike price first. For private company equity, the answer is murky. Use the most recent 409A valuation as the strike price reference for options, and use the last preferred-share round as a rough ceiling on common-stock value — though common stock is almost always worth significantly less than preferred at the same valuation.
Remember: private company equity is illiquid. Even if your paper value is high, you can't sell it without secondary markets or a liquidity event. Many startup employees discover this only when they leave and discover they have 90 days to write a five- or six-figure check to exercise their options — or lose them.