Full Definition
Acceleration in the context of equity vesting refers to provisions that speed up the vesting schedule, allowing a founder or employee to receive their equity faster than the original schedule. Acceleration is typically triggered by specific events like a company acquisition or termination.
Types of Acceleration
- Single Trigger: Acceleration upon one event (usually acquisition). All or a portion of unvested shares vest immediately when the company is acquired.
- Double Trigger: Acceleration requires two events (usually acquisition + termination within 12-24 months). More common and considered more balanced.
Common Terms
- Single trigger: 25-100% acceleration upon acquisition
- Double trigger: 50-100% acceleration upon acquisition + involuntary termination
- Partial acceleration: Only a portion of unvested shares accelerate
Single vs Double Trigger Acceleration
| Feature | Single Trigger | Double Trigger |
|---|---|---|
| Events Required | 1 (acquisition only) | 2 (acquisition + termination) |
| When equity vests | Immediately at acquisition | Only if terminated after acquisition |
| Typical acceleration | 25-100% | 50-100% |
| Founder preference | Strongly preferred | More common, balanced |
| Investor preference | Resisted | Acceptable |
Real-World Example
A CTO with double-trigger acceleration has 50% of their unvested shares vest when the company is acquired and they are terminated within 12 months.
Frequently Asked Questions
What is single trigger acceleration?
Why do investors prefer double trigger?
Related Terms
The process by which an employee or founder earns their equity over time based on continued service.
A minimum service period before any equity vests, typically one year in startup equity agreements.
Ownership interest in a company, represented by shares of stock.
When one company purchases another company, either by buying its assets or its equity.
The right to buy company shares at a predetermined price, commonly used as employee compensation in startups.
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