Founder vesting is the schedule on which a startup's founders earn their own founder common stock over time. Unvested shares can be repurchased by the company if a founder leaves before the schedule is complete. The startup standard is four years with a one-year cliff, often re-set or modified at the first priced round at the new investor's request.
In practice, founders are issued their stock as restricted stock at or near incorporation and the company holds a repurchase right over the unvested portion. If a founder departs before the cliff, the company can buy back the full grant at the original purchase price (often near zero). After the cliff, the company can repurchase only the unvested remainder. At the first priced ro...