A cliff is the minimum vesting period in an equity incentive plan before any rights are earned: no shares or options vest before the cliff expires, after which vesting becomes progressive. In fundraising and management package structures, a one-year cliff is standard: if the beneficiary leaves before 12 months, no rights are earned; beyond the cliff, vesting is typically linear over a total period of 3–4 years. It protects investors against early management departures and aligns incentives over the medium term.

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Example: a CEO receives 100,000 BSPCEs vesting over 4 years with a one-year cliff. If she leaves after 9 months, she receives nothing. If she stays 13 months, she immediately earns 25% (25,000 BSPCEs) upon the cliff, with the remaining 75,000 vesting monthly over the following 36 months. This mechanism creates a strong incentive to remain at least through the cliff period before any departure consideration.

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Hectelion structures cliff and vesting mechanisms in management packages to maximise long-term alignment between founders and investors.