When registering a grant on Carta, it is important to make sure that the grant vests as it is dictated in the grant agreement.
This article will help you to choose the correct vesting schedule for grants (e.g. options, warrants, phantom shares, RSUs and share grants) on Carta. Currently, there are four types of vesting schedule you can use in Carta:
Time-based vesting
Immediate
Custom vesting
Performance-based vesting
Time-Based Vesting
With time based vesting, shares vest on tranches distributed across regular intervals (e.g monthly, yearly, quarterly, etc).
There are currently 4 different time-based vesting schedule types. They each have a different method of distributing shares to vest across the vesting schedule.
In a grant agreement, it should be explained how the options shall vest and if in doubt you should seek expert advice.
They are listed and explained below:
Time-based (distribute evenly, round-up)
Time-based (distribute evenly, round-down)
Time-based (round-up)
Time-based (round-down)
Time-based non-linear
a) Time-Based (Distribute Evenly, Round-Up)
This vesting type rounds up the first tranche then distributes evenly in the same pattern.
If you are preparing an import file and want to use this vesting schedule fill in the field vesting_type as time_based_equal_round_up.
b) Time-Based (Distribute Evenly, Round-Down)
This vesting type rounds down the first tranche and then distributes evenly in the same pattern.
If you are preparing an import file and want to use this vesting schedule fill in the field vesting_type as time_based_equal_round_down.
c) Time-Based (Round-Up)
This vesting type rounds up the value of all tranches ending with a tranche with fewer shares.
If you are preparing an import file and want to use this vesting schedule fill in the field vesting_type as time_based_round_up.
d) Time-Based (Round-Down)
This vesting type rounds down any fractional vesting at each tranche and the last tranche vests the remaining shares.
If you are preparing an import file and want to use this vesting schedule fill in the field vesting_type as time_based_round_down.
e) Time-Based Non-Linear
Create a flexible distribution of tranches based on different vesting percentages for any number of periods and duration.
With this vesting type, you can define an time-based custom vesting based on percentage, frequency and period (the first period as the cliff).
If you are preparing an import file and want to use this vesting schedule fill in the field vesting_type as either time_based_non_linear_round_up for round-up vesting, or time_based_non_linear_round_down for round-down vesting.
