How do I set up a vesting schedule and what different vesting types exist?
Learn how to create, edit, and manage vesting schedules and presets for your equity plans.
A vesting schedule determines when a stakeholder gains ownership of their equity. Setting up clear and consistent vesting schedules is crucial for managing your cap table. Ledgy allows you to create reusable vesting presets to save time and reduce errors when issuing new grants.
Overview
Vesting schedules define the timeline and conditions for equity to vest. You can create custom schedules for individual grants or set up vesting presets to apply standard terms across your equity plans. This ensures fairness and consistency for all your stakeholders.
How to set up and manage vesting presets
Vesting presets are templates for your most commonly used vesting schedules. We recommend creating presets for standard employee and advisor grants.
Step 1: Create a vesting preset
Navigate to Company > Settings > Vesting.
Click Add vesting preset.
Enter a Name for your preset (e.g., "4-year, 1-year cliff").
Define the vesting terms, including the vesting type, length, frequency, and any cliff period.
Click Save preset to add it to your company's settings.
[Screenshot: Vesting preset creation modal on the Settings > Vesting page.]
Step 2: Edit a vesting preset
You can modify existing vesting presets at any time. The changes will only affect new grants created with the preset.
Navigate to Company > Settings > Vesting.
Find the preset you want to modify in the list.
Click the three-dot menu (...) on the right-hand side and select Edit.
Make your desired changes in the modal window.
Click Save preset.
Important: Editing a vesting preset does not change the vesting schedule for any grants that have already been created using that preset. The changes will only apply to new grants created with the preset going forward.
Common vesting types on Ledgy
Ledgy supports various vesting types to give you flexibility:
Time-based vesting: Grants vest over a set period. You can add a cliff, which is an initial period that must be completed before any shares vest.
Time-based with acceleration: Standard time-based vesting that can be fully or partially accelerated upon a specific event, like an acquisition (single trigger) or an acquisition and termination of employment (double trigger).
Milestone-based vesting: Grants vest upon the achievement of specific performance goals or company milestones.
Tip: For more complex or custom vesting schedules, you can always create a custom schedule directly on the grant itself instead of using a preset.
FAQs
What happens to my existing grants if I edit a vesting preset?
Your existing grants will not be affected. Editing a preset only impacts future grants that you create using that preset. The vesting schedule for grants that were already signed and issued remains unchanged.
Can I apply a new preset to an existing grant?
No, you cannot apply a preset to an existing grant. If you need to change the vesting schedule of an existing grant, you must cancel and re-issue the grant with the new terms, ensuring all parties sign the new agreement.