Cherrytree – Vesting Schedule

When Robin and Antje started Zipcar, they decided to split ownership 50/50. Fair and simple. At first, it seemed like a success story: the company grew, became highly profitable, and eventually went public.

But within a year and a half, conflicts caused Robin to fire Antje. Except, Antje kept her 50% stake in the company. Robin was stuck working around the clock for virtually no pay.

This is exactly why vesting exists. Without it, a cofounder can walk away with a huge slice of the company without putting in the work, leaving the remaining cofounders carrying the burden. Vesting means you earn your equity over time by building the company.

The standard is 4 years with a 1-year cliff — you earn nothing in year one, then 25% at the cliff, then monthly after that.

What vesting schedule will you use?

4 years with 1-year cliff 3 years with 1-year cliff Immediate Other

Single-trigger acceleration means unvested shares vest immediately if a cofounder is terminated without cause following an acquisition.

If the company is acquired and a cofounder is terminated without cause, should their unvested shares accelerate?

Yes No

This gives the board and other shareholders time to respond or exercise any right of first refusal before shares change hands.

If a cofounder wants to sell their shares, how many days notice do they need to provide the Board and shareholders?

This window gives the company time to arrange financing for the repurchase. 90 days is a common default.

If a cofounder resigns, how many days does the company have to buy back their shares?

This clause protects the company from equity remaining with someone unable to contribute.

Acknowledge unvested share forfeiture on incapacitation

I acknowledge that if a cofounder dies, becomes permanently disabled, or is otherwise incapacitated, their unvested shares are automatically forfeited and returned to the company.

Anika Bhagavatula (Admin)

This ensures clarity on what happens to already-earned equity in difficult circumstances.

If a cofounder becomes incapacitated, what happens to their vested shares?

The company has the option to repurchase vested shares at Fair Market Value The company must repurchase vested shares at Fair Market Value Vested shares transfer to the cofounder's estate or heirs, without voting or board rights

Note: If you receive unvested shares, you can file an 83(b) election within 30 days of incorporation. This lets you pay taxes on the current (usually low) value of your shares instead of their future value as they vest. Doing so can save you thousands (if not more) if the company grows, but the election is irreversible. Consult a tax advisor.