Vesting

Vesting is the mechanism by which an employee, director or founder progressively earns ownership or exercise rights over equity instruments — shares, BSPCEs, stock options — over time or upon achieving objectives. It aligns long-term interests by conditioning full ownership on continued commitment. The standard schedule is 4 years with a 1-year cliff (no rights vest before 12 months, then monthly vesting over 3 years). In fundraising, institutional investors systematically require vesting schedules for founders — protecting the company and remaining co-founders against early departures.

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Example: a founder receives 100,000 BSPCEs on a 4-year vesting schedule with 1-year cliff. If they leave at 8 months: 0 BSPCEs vested. At 18 months: 25,000 BSPCEs vested (25% at cliff end, then monthly vesting). At 4 years: 100,000 BSPCEs fully vested — each exercisable at the favourable strike price, generating capital gain on the difference with fair market value at exercise.

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Hectelion structures and values vesting plans in fundraising mandates and LBO management packages, balancing incentive strength with founder protection.