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    Vesting Schedule

    Timeline over which equity is earned by an employee or founder.

    Reviewed by Christian Espinosa, Founder, Blue Goat CyberLast reviewed May 5, 2026

    Definition

    Vesting is the process by which equity (founder shares, options, RSUs) becomes non-forfeitable over time. The standard schedule is 4 years with a 1-year cliff: 25% vests at the 1-year anniversary, then monthly thereafter.
    What the regulation says
    While not a direct regulatory requirement for MedTech product approval, vesting schedules, particularly for founders and key personnel, are critical for business stability and demonstrating long-term commitment. This stability indirectly supports compliance with quality management system requirements, such as those in 21 CFR Part 820 (Quality System Regulation) and ISO 13485:2016, by ensuring consistent leadership and resource allocation for regulatory affairs and product development. Investors and regulatory bodies assess the overall viability and management structure of a MedTech company, where founder vesting can be a positive indicator of robust governance.

    What this means in practice

    Founder vesting reassures investors that co-founders are committed; without it, a founder who leaves in year one keeps a huge chunk of the company.

    Examples

    • A MedTech startup implements a 4-year founder vesting schedule with a 1-year cliff to assure Series A investors of the co-founders' long-term dedication to achieving FDA clearance for their novel diagnostic device.
    • An early-stage MedTech company grants stock options to its lead regulatory affairs specialist with a 3-year vesting period to incentivize their continued employment through the complex EU MDR CE marking process.
    • During due diligence for acquisition, a large MedTech firm reviews the vesting schedules of the target company's executive team to ensure key talent will remain post-acquisition, critical for the ongoing compliance of their acquired product portfolio.
    Common pitfalls
    • •Assuming vesting schedules are only for founders, neglecting the importance of vesting for other key employees involved in critical regulatory or quality functions.
    • •Failing to clearly document vesting agreements, potentially leading to disputes that disrupt business operations and regulatory compliance efforts.
    • •Not considering the impact of accelerated vesting clauses during mergers or acquisitions on intellectual property ownership or continuity of key personnel.
    • •Overlooking tax implications of different vesting structures for employees, which can affect retention and morale.
    • •Drafting overly complex vesting conditions that are difficult to administer or understand by the vested parties.

    Frequently asked questions

    Vesting primarily impacts the MedTech regulatory landscape indirectly by ensuring business stability and continuity of leadership. This stability is crucial for maintaining a robust quality management system and consistently addressing regulatory obligations, as stipulated by regulations like 21 CFR 820 and standards such as ISO 13485.
    Grouped by theme

    Primary references

    3 sources
    Link health: 3 verified· last checked 2026-06-20
    Carta·1PitchBook·1NVCA·1
    1. 1
      Carta: vesting
      Verified
      Cartacarta.com
    2. 2
      PitchBook - MedTech Coverage
      Verified
      PitchBookpitchbook.com
    3. 3
      NVCA Model Documents
      Verified
      NVCAnvca.org

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