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Agreed, it is good to see someone advocating this. Of course, an even more moral thing to do would be to make it legally binding from the start, as in just use

Agreed, it is good to see someone advocating this. Of course, an even more moral thing to do would be to make it legally binding from the start, as in just use a 6 month cliff vesting period. If you're a founder or VC that would give a proportion before a cliff vest then perhaps make life simpler by considering a shorter cliff instead?

mmt 16y ago
Also agreed. The whole notion of cliff vesting never made sense to me, and the OP doesn't really explain it. The reason for the one year cliff is to protect the company and its shareholders (including the employees) from a bad hire which gets a huge grant of stock or options but proves to be a mistake right away. One year doesn't at all strike me as "right away." Even as few as 3 months seems a stretch, for a startup. A cliff vest allows the company to move the bad hire out of the company without any dilution.* Perhaps I'm missing something, since, with no cliff, isn't the amount of dilution proportional to the number of months of employment?
- gyardley 16y ago
  Less shareholders, less problems. You don't want to have to track down a bunch of short-term employees from four years ago when making corporate decisions. (Yes, I know the common generally has no rights to speak of, but sometimes you want to get the consent of everyone just to cover your butt, especially when things go bad.)
  - mmt 16y ago
    How big a deal is this? That is, how much does it cost? How many short-term employees does a typical startup tend to have? What percentage of short-term employees exercise if they leave? Are there any statistics, or does everyone blindly use a year-long cliff?
    - gyardley 16y ago
      It can be a huge deal if some disgruntled shareholder causes legal problems. Binary outcome - most of the time, no consequences, occasionally, massive ones. No stats for you but short-term employees seem pretty common. I've had them, and I've been one. I bet you've left jobs before a year was up as well. Zero percent of short-term employees exercise their options when they leave, because they can't. But options are really cheap prior to a Series A, so I imagine a lot of the early people would if they could. 'Blindly' is the wrong word for going with an established industry standard. Job candidates and investors both understand it and expect it - you don't have to waste cycles thinking about it or explaining it. Startups are fussy enough as it is, no point messing with something that works.
- alain94040 16y ago
  I'm in favor of 6-month cliffs. Frankly, one-year is company friendly. But since everyone is used to it, no one particular employee can change it. If you have been working for me for 6 months and I haven't fired you, then you must have produced something useful. It doesn't take me 6 months to know who is not performing.

mmt 16y ago

Also agreed. The whole notion of cliff vesting never made sense to me, and the OP doesn't really explain it. The reason for the one year cliff is to protect the company and its shareholders (including the employees) from a bad hire which gets a huge grant of stock or options but proves to be a mistake right away. One year doesn't at all strike me as "right away." Even as few as 3 months seems a stretch, for a startup. A cliff vest allows the company to move the bad hire out of the company without any dilution.* Perhaps I'm missing something, since, with no cliff, isn't the amount of dilution proportional to the number of months of employment?

gyardley 16y ago
Less shareholders, less problems. You don't want to have to track down a bunch of short-term employees from four years ago when making corporate decisions. (Yes, I know the common generally has no rights to speak of, but sometimes you want to get the consent of everyone just to cover your butt, especially when things go bad.)
- mmt 16y ago
  How big a deal is this? That is, how much does it cost? How many short-term employees does a typical startup tend to have? What percentage of short-term employees exercise if they leave? Are there any statistics, or does everyone blindly use a year-long cliff?
  - gyardley 16y ago
    It can be a huge deal if some disgruntled shareholder causes legal problems. Binary outcome - most of the time, no consequences, occasionally, massive ones. No stats for you but short-term employees seem pretty common. I've had them, and I've been one. I bet you've left jobs before a year was up as well. Zero percent of short-term employees exercise their options when they leave, because they can't. But options are really cheap prior to a Series A, so I imagine a lot of the early people would if they could. 'Blindly' is the wrong word for going with an established industry standard. Job candidates and investors both understand it and expect it - you don't have to waste cycles thinking about it or explaining it. Startups are fussy enough as it is, no point messing with something that works.
alain94040 16y ago
I'm in favor of 6-month cliffs. Frankly, one-year is company friendly. But since everyone is used to it, no one particular employee can change it. If you have been working for me for 6 months and I haven't fired you, then you must have produced something useful. It doesn't take me 6 months to know who is not performing.