What Is Vesting?

A mechanism under which ownership or related rights become available over time or upon specified conditions.

What Does Vesting Mean?

Vesting is a common mechanism in startup arrangements under which ownership interests or related rights are earned over time or upon conditions, rather than being available immediately.

Why It Matters

Vesting aligns long-term commitment with ownership. Its terms, including schedules and conditions, should be clearly documented so everyone understands how and when rights become available.

Related Information

Related legal terms: Founders’ Agreement, Shareholders’ Agreement

Related practice area: Startup Legal Services →

Dealing With a Related Matter?

This explanation is a general starting point. If the term matters in a specific situation you are facing, a conversation about your facts can help you decide the right next step.

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This definition provides general information and does not constitute legal advice. Laws change, and their application depends on the facts of a matter. For advice on your specific situation, consult a qualified lawyer.