A waiting period (usually one year) before any equity begins to vest. If an employee leaves before the cliff, they receive zero equity.
Why it matters: The cliff prevents equity leakage to bad hires who wash out quickly, saving the company the administrative burden of recovering tiny equity fractions.
In practice: An employee with a 1-year cliff leaves at month 11. They walk away with 0 shares. If they leave at month 13, they keep 25% of their total grant plus one month's worth.