Cliff
In the startup world, a cliff is the term used to describe the length of time before either a startup founder or a recipient of stock options first becomes partially vested in their restricted stock or stock options.
A typical cliff is one year, but can be shortened or lengthened as appropriate to the startup’s situation. For example, if a startup founder vests his or her shares over 2 years, but has a 1 year cliff, the startup founder would be 0% vested in his or her shares up until the end of the year period.
About the Author
Ryan Roberts is a startup lawyer and represents technology companies through all phases of the startup process, including incorporation, seed & venture financings, and exit transactions. Click here to learn more about his practice.
