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Reverse Vesting

Reverse Vesting

Reverse Vesting defined: Reverse vesting is a vesting schedule offered by pre-IPO companies. Under the agreement, stock options may be exercised immediately after they are granted in exchange for restricted shares in a company that have separate vesting schedules. Reverse vesting is used as a tax-planning technique when used in combination with Section 83(b) of the Internal Revenue Code.

Above is a definition for “Reverse Vesting” from PrivCo’s Private Company Knowledge Bank, the definitive online and e-book guide to private companies and private company deals.

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