Founder Note 004VestingFounder Equity

What Is Founder Vesting?

By Ilyès, CEO & GoodFounder · 5 min read

Founder vesting means founder equity is earned over time. Before incorporation, Goodvernance tracks intended founder equity, not issued shares.

Here is the scenario every founder dreads and few discuss at the start. Three of you split the company evenly on day one. One of you leaves after six months. That person now holds a third of everything, forever, having barely begun. The two who stay build the entire company while a third of it belongs to someone who is gone.

Vesting exists to make that impossible. The idea is simple: you earn your equity over time, instead of owning all of it the moment you start. Leave early, and you keep only what you earned.

Vesting is not a trust test. It is a fairness mechanism.

The common reference point in startups is four years with a one-year cliff. Nothing is earned in the first year. Hit the one-year mark and a first chunk is earned at once. After that it accrues gradually, often monthly, until it is fully earned at year four. That is a widely used pattern, not a legal recommendation, and the right numbers depend on your situation.

Now the part that matters before incorporation. There are no shares yet, so nothing is technically vesting in the legal sense. What you are agreeing is how your intended founder equity should be earned over time, and how that will later be implemented once the company exists. This is a commitment between founders, not an issuance of stock.

That distinction is why Goodvernance tracks earned and unearned intended equity rather than pretending shares exist. The dashboard simply shows, today, how much of each founder's intended stake has been earned under the agreement you signed. No company is formed, no shares are issued, no stock ledger is created.

Done right, vesting is what keeps the equity split fair to the people actually building the company. It is alignment, not suspicion.

Ilyès, CEO & GoodFounder

Frequently asked questions

What is a common founder vesting schedule?

A widely used reference is four years total with a one-year cliff, earning gradually after the cliff. It is a common pattern rather than a rule, and the right terms depend on your situation.

Does vesting before incorporation mean shares?

No. Before incorporation there are no shares. Founders agree how intended founder equity is earned over time, and that commitment is implemented through proper equity documents after the company is formed.

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Related notes

This is general information, not legal advice. Goodvernance does not provide legal advice. Learn more.