Why fully vested matters to a first-time founder
Vesting determines what a founder, employee or adviser keeps after leaving and how much equity can return to the company. Once a grant is fully vested, continued service usually earns no further portion under that schedule. Exercise deadlines, transfer restrictions and repurchase rights may still affect the holder.
Examples of fully vested
An employee receives options over 48,000 shares that vest monthly over four years after a one-year cliff. After completing all 48 months, all 48,000 options are vested. The employee may still need to exercise them by a deadline and pay the exercise price to receive shares.
Common misunderstanding
It does not necessarily mean the holder owns unrestricted shares. Vested options may remain unexercised, expire or be subject to plan terms. Vested shares may still face transfer restrictions. Vesting concerns whether the right has been earned, not whether every later condition or payment has been completed.
When to use it
Check vested status before processing a departure, acquisition, option exercise or cap-table update. Read the grant, plan and any acceleration terms rather than estimating from a start date. For a new grant, use a clear schedule and have local counsel confirm tax and employment implications.