Carta, the startup data provider, has analyzed the development in VC terms (based on US companies).
Founder vesting
While founder vesting is essential to prevent “dead equity”, and the standard is a 4-year schedule, the discussion around extending vesting periods has gained traction.
The data shows that most founders follow a 4-year vesting schedule, often without a 1-year cliff, but Carta has seen some movement toward 6-year schedules, though adoption is limited.
The vesting schemes need to be seen from a broader perspective and be tied to funding rounds. As the median time to Series A is slightly beyond 4 years; many startups are still raising investments at this stage. Therefore, fully vested founders during early growth stages may face pressure to re-vest equity during subsequent funding rounds, typically for an additional 4 years.
The questions thus is – should vesting schemes be extended from the 4-year standard?
Read the full blogpost here.
Liquidation preferences
A liquidation preference of 1x remains the market standard across early and growth startups, even as markets have faltered in the last few years.
In 2024, only 1.9% of seed or Series A rounds included liquidation preferences over 1x.
Higher preference rates than 1x are late-stage trends, as 1.5x, 2x, or higher preferences are typically seen in later-stage deals, not early rounds.
Higher liquidation preferences are more common in bridge rounds than in new primary financings.
Read the full blogpost here.
