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Sheshank explains the thinking behind ESOP Value Clarity.
Start with the founder's explanation, then move through the decision framework below. This keeps the article connected to the product instead of feeling like a generic content page.
Article
ESOP vesting schedule: granted is not the same as earned
Year 1
cliff risk
Years 2-4
gradual vesting
Exit
unvested may lapse
Meaning
Vesting turns a grant into an earned right over time.
Receiving 10,000 options does not usually mean all 10,000 are immediately available to exercise. The vesting schedule defines how much becomes vested and when.
Cliff
A one-year cliff can make the first year binary.
Under a common one-year cliff, no options vest before the first anniversary. At the cliff, a first portion may vest, with the remainder vesting monthly or quarterly afterwards.
Before cliff
0% may be vested
At cliff
25% may vest
After cliff
monthly or quarterly
Leaving risk
Vesting matters most when employment changes.
If you leave before vesting, unvested options are commonly forfeited. If you leave after options vest, the post-termination exercise window becomes the next important rule.
Why this matters to each reader
Employee
Know how much is actually vested before comparing offers or resigning.
Founder
Vesting protects the company but must be explained clearly.
HR
Candidates need examples, not only plan language.
Advisor
Timing determines whether options can be exercised at all.
Decision checklist
Check total vesting duration.
Confirm cliff length and cliff percentage.
Check monthly, quarterly or annual vesting after cliff.
Confirm vesting start date.
Understand what happens when employment ends.
Common mistakes
FAQ
What is a one-year cliff?
It means the first vesting event may happen only after completing one year, subject to the grant terms.
What happens to unvested options when I leave?
They are commonly forfeited unless the documents provide special treatment such as acceleration.
Educational content
This guide explains general equity concepts and is not financial, investment, legal, employment or tax advice. Company plans and individual circumstances differ. Use official documents and appropriate professional advice for material decisions.
Knowledge to modelling
Apply this guide to your own ESOP assumptions.
Use ESOP Value Clarity to connect grant size, vesting, exercise cost, dilution and exit scenarios instead of relying on a headline number from "ESOP vesting schedule: granted is not the same as earned".
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