Vesting is the schedule on which a person earns the right to keep granted equity. Unearned shares or options are forfeited and returned to the company if the recipient leaves before the schedule is complete. It applies to founders, employees, advisors, and (rarely) board members, and exists to make sure equity rewards people who stay and contribute over multiple years rather than people who took a grant and left.
The standard startup vesting schedule is four years with a one-year cliff: nothing vests for the first 12 months, then 25% vests on the cliff date, and the remaining 75% vests in equal monthly increments over the next 36 months (1/48th of total per month). The cliff is binary: leave on day 364 and you walk away with zero; l...