Linear vesting (Swedish: linjär vesting) is a vesting model where the same portion of the shares or options vests at regular intervals, such as monthly or quarterly, until fully vested. The model is often combined with an initial period without vesting, known as a cliff.
It is common in incentive programs and for founders, with terms often set out in a shareholders' agreement. Other models are back-loaded vesting and milestone-based vesting. Shares enter the share ledger when allotted, while the cap table can show vested and future holdings.
Vesting is the period or conditions that must be met before someone gains full rights to shares or options.
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Back-loaded vesting is a vesting model where a smaller portion vests early and a larger portion at the end.
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Milestone-based vesting means rights are earned when the company or the individual reaches set goals.
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Hybrid vesting is a vesting model that combines time-based conditions with milestones.
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