Reverse vesting is the mechanism where founder stock already issued at company formation becomes subject to a vesting schedule. Unvested shares are subject to company repurchase at original purchase price if the founder departs early, making the structure "reverse" because shares are owned upfront but earned over time through continued service, with 4-year vesting and a 1-year cliff being standard for founder shares in venture-backed startups. It's the structure that protects co-founders and investors from a founder taking equity and leaving.
The mechanics:
Initial issuance: founder receives shares at formation (typically restricted stock, not options).
Vesting schedule applied: 4-year monthly vesting with 1-year cliff is st...