Why does Vesting Acceleration (Single vs. Double Trigger) matter?
It decides who bears the risk in an acquisition where the acquirer wants to keep the team. Without any acceleration, a founder or early employee can be fired the day after close and lose years of unvested equity they were counting on the deal to realize. Single trigger protects them completely but makes the company less attractive to acquire, because a buyer who wanted to retain and incentivize the team just watched everyone's equity fully vest and their reason to stay disappear. Double trigger is the standard compromise: it protects people specifically from being pushed out to avoid paying them, without handing everyone a payday the moment the deal closes regardless of what happens next.
What does Vesting Acceleration (Single vs. Double Trigger) look like in practice?
Suppose a founder has two years of unvested shares left when the company is acquired. Under a double trigger, those shares keep vesting on the original schedule as long as the founder stays in a comparable role at the acquirer; if the acquirer terminates them or meaningfully changes their role within some window after close, the remaining unvested shares accelerate immediately. Under single trigger, all of it would have accelerated at the moment the deal closed, whether or not the founder stayed a single day afterward.
What are the common mistakes with Vesting Acceleration (Single vs. Double Trigger)?
- Negotiating single trigger acceleration for founders, which can make later acquirers structure around them or discount the deal to account for it.
- Having no acceleration terms at all, leaving a founder's post-acquisition fate entirely at the buyer's discretion.
- Not defining what counts as a triggering termination or demotion precisely enough, which invites disputes exactly when trust is lowest.
- Assuming the same acceleration terms are appropriate for both founders and early employees, when investors and acquirers usually expect narrower terms for the latter.
Related concepts
- Vesting and the CliffVesting is earning equity gradually over time by staying with the company; the cliff is the initial period, usually one year, during which none of it vests, so someone who leaves early walks away with nothing.
- Co-Founder Equity SplitHow ownership of the company is divided among the founding team at the outset. A decision made with the least information a company will ever have about who contributes what.
- Lead Investor and the Term SheetThe lead investor is the firm that sets the terms of a round and typically writes its largest check; the term sheet is the document in which they propose those terms before legal work begins.
- Founder Lock-UpA restriction, negotiated as part of an acquisition or IPO, preventing a founder or major shareholder from selling their remaining stock in the acquiring or newly public company for a set period after closing, distinct from equity vesting, which governs whether unvested shares are earned at all.