How founders/employees earn their equity over time
Vesting is the process by which founders and employees earn their equity stake over time. Standard startup vesting is a 4-year schedule with a 1-year cliff: you earn nothing for the first year, then 25% at the 1-year mark, then 1/48th per month for 3 more years.
A founder with 1 million shares on a 4-year vest with 1-year cliff: 0 shares at month 11, 250,000 shares at month 12, ~20,833 shares/month from month 13–48.