Vesting acceleration determines what happens to unvested equity when the company is acquired or an executive is terminated.
Vesting acceleration terms decide what happens to unvested stock and options at pivotal moments — most importantly, when the company is acquired. Founders and early executives typically negotiate some form of acceleration in their equity agreements. The distinctions matter: single-trigger accelerates on the change-of-control alone; double-trigger requires both a change-of-control and involuntary termination. Acquirers dislike single-trigger because it removes retention incentive; boards typically prefer double-trigger to keep leadership focused. Founders should understand what they signed, negotiate acceleration when it's negotiable, and re-negotiate at appropriate moments if the original terms were founder-unfavorable.
Single-trigger: 100% (or a specified %) of unvested equity vests upon a change-of-control event alone — the company is sold, and unvested shares immediately vest, even if the employee stays. Double-trigger: acceleration requires two events: (1) change-of-control AND (2) involuntary termination without cause (or 'good reason' resignation, often within 12 months of the acquisition). Employees keep vesting normally through an acquisition; acceleration only fires if the acquirer fires them or forces them out. Double-trigger is the modern standard for executives and increasingly for founders.
Historically, founders often had single-trigger acceleration on 100% of unvested shares. Modern norms shifted: most VCs push for double-trigger on founders, sometimes with a 'compromise' single-trigger on 25-50% and double-trigger on the remainder. Watch your original equity agreements — many founders discover at acquisition time that they have less acceleration than they thought. If your acceleration terms are unfavorable, the negotiating moments to fix them are: at each priced round (bundle with the round-close negotiation), and at any executive-hire or promotion event that requires updated equity documents.
Standard executive package: double-trigger acceleration on 100% of unvested equity, with 'good reason' resignation triggering the second prong. 'Good reason' typically includes: material reduction in title/responsibilities, meaningful compensation cut, relocation beyond a threshold distance, or material breach of the employment agreement by the acquirer. C-level executives sometimes negotiate single-trigger on 25-50% plus double-trigger on the remainder. VPs and directors typically get double-trigger only.
Acquirers pay for future employee retention as much as for the assets. If most of the acquired company's leadership team has 100% single-trigger acceleration, the acquirer buys a business whose leaders can walk out on day one with all their equity. This is priced into the deal — acquirers discount their offer to account for acceleration or reallocate consideration to retention packages (new grants, cash retention bonuses) that only pay if executives stay 2-4 years. Double-trigger structures preserve deal value by keeping retention incentive intact.
At acquisition, acceleration terms get renegotiated as part of the transaction. Common patterns: (1) acquirer buys out unvested equity via a retention package (cash or acquirer stock, vesting 2-4 years); (2) partial acceleration at close plus continued vesting on remainder; (3) full acceleration for departing executives, continued vesting for those staying. The specific outcome depends on your original terms, your leverage, and the acquirer's retention priorities. Get personal counsel — the company's counsel represents the company, not you individually, and interests diverge sharply at acquisition.
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