You agree that founder equity should reflect continued involvement. The hard part is making that agreement work when someone leaves, the company is sold or the documents say different things.
A founder vesting schedule describes how an agreed economic entitlement develops over time. It does not, on its own, tell you who legally owns shares today or what happens on departure. Those answers depend on the instrument, company law, articles and agreements. Check the schedule together with leaver, transfer, repurchase and tax provisions.
This guide helps you organise that review and the records afterward. It focuses on questions for founders in Portugal and the UK, with England and Wales as the UK reference jurisdiction. Obtain company-law and tax advice before adopting or changing a structure.
What a vesting schedule tells you
A schedule should identify the person, equity or rights affected, start date, vesting events and any conditions. A cliff is the initial period before the first scheduled vesting event. Acceleration changes the timetable when a defined event occurs.
The UK Government's Knowledge Asset Spinouts Guide includes a four-year schedule with a one-year cliff as an example. That guide concerns public-sector spinouts. The example is useful for understanding the arithmetic; it is not a rule requiring every startup to use that structure.
Your agreement may use monthly, quarterly, milestone-based or other conditions. It should specify how periods are counted, whether earlier service counts and what happens during leave or a change of role. Do not fill a missing start date with the signature date just because it is convenient.
Vesting is not the same as legal ownership
Different arrangements can produce different ownership positions. Shares may already have been issued with contractual transfer or repurchase arrangements. Options may instead create a right to acquire shares later. A contractual cash entitlement is a different instrument again.
“Reverse vesting” commonly describes an arrangement in which shares are held from the outset but an agreed mechanism can apply to the unvested portion if a founder leaves. The legal implementation needs checking against the company and its documents.
Avoid saying that a founder owns no shares before the cliff unless that is actually how the structure works. Likewise, an entry marked “unvested” does not establish that shares disappear automatically on departure.
For a Portuguese sociedade por quotas, Article 228 of the Código das Sociedades Comerciais contains specific rules on transfers of quotas. A US restricted-stock template is not a substitute for checking those rules, the articles and the intended mechanism.
Read six things together
| Item | Question to resolve |
|---|---|
| Equity instrument | Are these shares, quotas, options or contractual rights? |
| Schedule | What starts the clock and what vests at each event? |
| Leaver definitions | Which departures count, who decides and what procedure applies? |
| Price | What price applies to each portion, and how is it determined? |
| Transfer or repurchase | Who can act, by when, with what approvals and funding? |
| Acceleration | What event changes the schedule, and how does it interact with a sale? |
Check the founders' agreement, shareholders' agreement, articles, relevant employment or service terms, grant documents and cap table. Identify which document prevails if they disagree. A correct calculation cannot resolve conflicting legal terms.
A fictional schedule, with the assumptions visible
Assume a founder's allocation is subject to a 48-month schedule. It has a 12-month cliff, then equal monthly vesting, with no prior-service credit, pauses, departure adjustments or acceleration. The first event vests 25% of that allocation; the remaining 75% vests over 36 months.
| Time completed | Portion of the original allocation vested |
|---|---|
| 11 months | 0% under this assumed schedule |
| 12 months | 25% |
| 18 months | 37.5% |
| 48 months | 100% |
These are portions of the founder's allocation, not percentages of the whole company. If the original allocation represented 40% of the company, 37.5% of that allocation would represent 15% of the company on an unchanged capital base. Financing, grants and other changes can alter that base.
The table also does not decide the legal ownership or transfer outcome. Record those separately. At month 18, you still need to read the departure provisions to know what can happen to the vested and unvested portions.
Test the agreement against real decisions
A founder leaves before the cliff
Check the definition and effective date of departure. Identify who can exercise a transfer or repurchase right, the price, required approvals and any exercise period. Record the actions needed; do not assume an automatic transfer.
A founder leaves after part of the allocation has vested
Check whether the agreement distinguishes good and bad leavers, how the classification is made and whether it affects vested equity as well as unvested equity. A label can carry consequences beyond the schedule.
The company is acquired
Single-trigger acceleration depends on one defined event. Double-trigger acceleration depends on two. The actual definitions matter: a company sale, a termination, a role change or a time window can be described differently across documents. Do not call one model universally investor-friendly.
The company does not exercise a right in time
Check the deadline, decision owner and what happens if the period passes. An operational reminder must connect to the relevant clause and event. It cannot cure a defective structure or establish that the company can lawfully acquire the equity.
Treat tax as a separate review
Do not instruct every European founder to file a US 83(b) election. The IRS Section 83(b) election form and instructions concern a US tax mechanism, not a Europe-wide filing step. Ask an adviser about the relevant instrument, company, tax residence and events before assuming a US election applies.
For UK employment-related securities, HMRC explains that founder status does not by itself exclude an award from the rules. HMRC's restricted-securities election guidance describes its own conditions and timing. This is not an instruction to make an election; ask a UK tax adviser whether one is relevant before an acquisition or change.
For Portugal, identify the company form, instrument, recipient's status and proposed events for local tax advice. Do not describe a general EU equivalent to 83(b), or infer tax treatment from a vesting spreadsheet.
Keep the signed documents and event record together
After the structure is agreed, record the final documents, person, instrument, allocation, vesting start, cliff, periodic events and relevant source clauses. Give the record an owner and add the professional advice needed for implementation to the restricted document set.
When someone leaves or a transaction begins, preserve the event date and evidence. Record who checked the trigger, the decision, required approvals and any transfer or repurchase action. Update the cap table after the relevant action, not merely because the spreadsheet changed.
Use the founder-event sheet alongside the contract register. It is a record template, not a vesting agreement or a tax calculator. Limit access because founder, employment and tax records contain sensitive information.
Review the agreement before relying on the schedule
Collect the documents and test the cliff, departure and sale scenarios against their actual terms. See Outlex Contract Review for the current product approach to reviewing documents. Instruct company-law and tax advisers separately for advice on your structure.
This guide is general information, not legal or tax advice. Fictional calculations explain an assumed schedule; they do not determine ownership, enforceability or tax.
