Cliff vesting in a startup refers to a particular date after which you will be entitled to a percentage of shares in the company if you were given the option of share vesting. It is a practice many employers use to try and retain employees.
For example…
Let’s say you have a startup, Plumber On Call which aims to connect householders and businesses in need of a plumber with one around their area at that time. Much like an Uber for Plumbers. You then decide to hire several programmers to help you develop the app. You offer 25% share vesting on a one year cliff. This means Joe, who decided to quit after six months working for you will get nothing. Jane, who marked her one year anniversary will reap the benefits of the 25% share as interest in Plumber On Call just went through the roof!
