Vesting Acceleration: Single vs. Double Trigger Explained

Six months after your company gets acquired for $20 million, you're fired by the acquiring company. You had four years left on your vesting schedule. Because you didn't negotiate acceleration, you just lost $600,000 in equity compensation. Same outcome, different term sheet structure, and you'd have walked away with that money.

Vesting acceleration provisions are often overlooked during financing negotiations—right up until an acquisition happens. Then they become one of the most consequential terms in the entire deal structure, determining whether founders and employees capture the value they've built or watch it evaporate due to a technicality.

In this guide, we'll break down exactly how vesting acceleration works, the critical difference between single-trigger and double-trigger acceleration, and how these provisions protect (or fail to protect) both founders and investors during acquisitions.

What Is Vesting Acceleration?

Vesting acceleration is a provision that speeds up the vesting schedule for founder or employee equity when certain events occur—most commonly an acquisition (change of control) or involuntary termination.

Without acceleration, your equity vests according to the standard schedule (typically four years with a one-year cliff). If the company is acquired in year two and you're terminated, you'd only keep the equity that had already vested (50% in this example), forfeiting the unvested 50%.

Acceleration provisions change this math by automatically vesting some or all unvested equity when triggering events occur.

The Two Types of Acceleration Triggers

Single-Trigger Acceleration (Founder-Friendly, Buyer-Hostile)

Single-trigger acceleration means unvested equity automatically accelerates upon a single event: acquisition (change of control). The moment the acquisition closes, some or all unvested shares immediately vest, regardless of what happens next.

Example:

• Founder has 1 million shares on a 4-year vest, 2 years in (500K vested, 500K unvested)
• Company is acquired
• With 100% single-trigger: All 500K unvested shares immediately vest at closing
• Founder walks away with 1 million shares fully vested, even if they quit the next day

Single-trigger acceleration is founder-friendly because it guarantees you capture the full value of an acquisition regardless of what the acquiring company does with you. However, it's problematic for acquirers who need founders to stay and transition the business.

Double-Trigger Acceleration (Balanced, Most Common)

Double-trigger acceleration requires two events to occur before unvested equity accelerates:

1. First trigger: Change of control (acquisition)
2. Second trigger: Involuntary termination "without cause" or resignation for "good reason" within a specified time period (typically 12-18 months post-acquisition)

Same example:

• Founder has 500K unvested shares at acquisition
• With double-trigger: Shares do NOT accelerate at acquisition
• Founder continues working for acquiring company
• 6 months later, founder is terminated without cause
• Now both triggers are met: 100% of remaining unvested shares (375K) immediately vest
• Founder gets 875K total vested shares

Double-trigger balances founder protection with acquirer retention needs. If you stay and perform well, you continue vesting normally. If you're fired or constructively forced out, your unvested equity accelerates.

Acceleration Percentages: Full vs. Partial

Acceleration can be structured as:

• 100% acceleration: All unvested shares immediately vest
• Partial acceleration: A percentage (commonly 25%, 50%, or 75%) of unvested shares vest
• Time-based: A fixed time period (e.g., 12 months) of unvested shares accelerate

The economic difference is substantial:

The difference between no acceleration and full acceleration in this example is $5 million. Even the difference between 25% and 100% is $3.75 million—life-changing money for most founders.

Defining "Good Reason" and "Cause"

Double-trigger acceleration hinges on precise definitions of "involuntary termination without cause" and "resignation for good reason." These definitions determine whether the second trigger actually fires.

Termination Without Cause

"Without cause" generally means the acquiring company fires you for reasons other than:

• Criminal conduct or fraud
• Gross negligence or willful misconduct
• Material breach of employment agreement
• Continued failure to perform duties after written warning

Being fired because the acquirer "wants to go in a different direction" or "is restructuring the team" qualifies as "without cause" and triggers acceleration.

Resignation for Good Reason

"Good reason" protects founders from being constructively forced out without triggering acceleration. Common "good reason" definitions include:

• Material reduction in base salary (typically >10-15%)
• Material reduction in responsibilities or title
• Relocation requirement (e.g., moving >50 miles from current office)
• Material breach of employment agreement by the company

Example: You're VP of Engineering pre-acquisition making $200K. Post-acquisition, the acquirer demotes you to Senior Engineer and cuts your salary to $150K. This meets the "good reason" definition, allowing you to resign and trigger acceleration.

Strong "good reason" definitions prevent acquirers from manufacturing situations that force founders to quit without triggering acceleration.

How Vesting Acceleration Can Be Used Against Founders

While acceleration provisions are designed to protect founders, their absence or weak structure can create devastating outcomes in acquisitions.

Scenario 1: No Acceleration Clause

A founder owns 20% of a company (2 million shares) on a 4-year vesting schedule. The company is acquired for $30 million after 18 months (founder has vested 750K shares, 1.25M unvested).

With no acceleration clause, the acquisition proceeds split:

• Founder receives proceeds for 750K vested shares only
• At $15/share: 750K × $15 = $11.25M
• Founder forfeits 1.25M unvested shares worth $18.75M

Three months post-acquisition, the acquiring company fires the founder "without cause" (really because of culture fit). The founder walks with $11.25M instead of $30M—a $18.75M loss due to the absence of acceleration.

Scenario 2: Only 25% Acceleration

Same scenario, but the founder negotiated 25% double-trigger acceleration. Upon termination:

• 750K shares already vested
• 25% of 1.25M unvested = 312.5K shares accelerate
• Total vested: 1.0625M shares
• At $15/share: $15.94M (vs. $30M with full acceleration)
• Left on table: $14M

The founder negotiated acceleration but left $14M on the table by accepting 25% instead of pushing for 100%.

Scenario 3: Weak "Good Reason" Definitions

A founder has double-trigger acceleration but with a narrow "good reason" definition that only includes salary reductions >25% and relocations >100 miles.

Post-acquisition, the acquirer:

• Reduces founder's salary by 20% (below the 25% threshold)
• Removes all management responsibilities (but "good reason" didn't include title/role changes)
• Moves office 80 miles away (below the 100-mile threshold)

The founder's situation has become untenable, but none of the changes meet the "good reason" definition. If the founder quits, they forfeit unvested equity without triggering acceleration. They're stuck in a miserable job or forced to walk away from millions.

Why It Matters

Acquisitions are messy. Promises made during deal negotiations often evaporate post-close. Without strong acceleration provisions, founders can find themselves trapped: stay in an impossible situation or walk away from substantial unvested equity. Weak acceleration terms create enormous leverage for acquiring companies to force founders out without paying for it.

How Vesting Acceleration Can Be Used Against VCs

While vesting acceleration is primarily a founder protection mechanism, overly aggressive acceleration structures can harm investors by destroying acquisition economics or making deals impossible to close.

Scenario 1: 100% Single-Trigger for All Employees

A startup has granted stock options to 40 employees totaling 20% of the company (2M shares), with an average of 50% unvested (1M unvested shares). All employees have 100% single-trigger acceleration.

Company negotiates an acquisition for $50M. At deal announcement, all 1M unvested employee shares immediately vest.

Impact on the acquisition:

• $50M ÷ 10M shares = $5/share
• 1M shares × $5 = $5M in immediate equity compensation paid at close
• Acquirer now owns a team with zero unvested equity and zero retention incentive
• Every employee can quit day 1 post-close with their full equity payout

The acquiring company sees this structure and responds in one of two ways:

1. Reprice the deal: Reduce purchase price by $5M to $45M to offset the acceleration cost
2. Walk from the deal: Determine the retention risk is unacceptable and abandon the acquisition

In either scenario, investors lose. The deal reprices lower, or the deal dies entirely. That $5M difference comes directly from investor proceeds.

Scenario 2: Founder 100% Single-Trigger Without Investor Consent

Founders negotiate 100% single-trigger acceleration for themselves (but not employees) without investor board consent.

The company raises three rounds and founders now own 30% (down from original 100%). An acquisition offer comes in at $40M. Founders have $8M in unvested equity that immediately vests at close.

Post-close, both founders immediately resign to start a new company (they've been planning this for months). The acquiring company is left with no founders, no transition plan, and a $40M acquisition that's now worth far less.

The acquirer sues for fraud, the deal unwinds, and everyone (including investors) loses the acquisition opportunity. Alternatively, the deal reprices downward by $8M when the acquirer discovers the single-trigger terms.

Why It Matters

Aggressive acceleration provisions, particularly 100% single-trigger for founders and employees, can destroy acquisition value. Acquirers aren't buying just technology or customers—they're buying teams. When acceleration eliminates all retention incentives at close, acquirers either walk or reprice deals. These outcomes directly harm investor returns.

Current Market Standards (2024-2025)

The market has largely converged on balanced acceleration structures:

• Founders: 50-100% double-trigger acceleration is standard (100% increasingly common for founding teams)
• Executives: 50% double-trigger acceleration is typical
• Employees: 0-25% double-trigger acceleration (or none, relying on acquiring company retention packages)
• Time window: 12-18 months post-acquisition for second trigger (12 months most common)
• "Good reason" definitions: Increasingly robust, typically including role/title changes, salary reductions >10%, and relocations >50 miles
• Single-trigger: Rare (<5% of deals) and usually only for founders in founder-friendly financings

According to Cooley's 2024 M&A study, 78% of venture-backed acquisitions include double-trigger acceleration for founders, up from 62% in 2020. The market increasingly recognizes that balanced acceleration aligns incentives and facilitates smoother acquisitions.

Key Negotiation Points

For Founders:

• Push for 100% double-trigger. It's increasingly standard and balances your protection with investor/acquirer needs.
• Define "good reason" broadly. Include title/role changes, salary cuts >10%, relocation >50 miles, and material responsibility reductions.
• Extend the time window. Negotiate for 18-24 months post-acquisition rather than 12 months. Many issues surface 12-18 months post-close.
• Avoid "cure periods." Some acquirers request 30-60 day cure periods before "good reason" triggers. Resist this—it extends bad situations and creates ambiguity.
• Cover key employees. Ensure your critical leadership team (CTO, VP Engineering, VP Sales) have meaningful acceleration as well.

For VCs:

• Support reasonable founder acceleration. 100% double-trigger for founders is fair and doesn't harm acquisition economics.
• Limit single-trigger provisions. Single-trigger creates acquisition friction. If you must accept it, limit to founders only, not entire employee base.
• Board consent for acceleration changes. Ensure founders can't unilaterally change acceleration provisions without board approval.
• Model the acquisition impact. Understand how much capital will accelerate in realistic acquisition scenarios and ensure it doesn't destroy deal economics.

Why This Matters

Vesting acceleration is one of those terms that seems theoretical during financing rounds but becomes intensely practical during acquisitions. The presence or absence of acceleration, and its structure (single vs. double trigger, 50% vs. 100%), can swing millions of dollars between parties.

For founders, strong acceleration provisions ensure you capture the value you've built even if the acquisition doesn't go as planned. For investors, balanced acceleration facilitates cleaner acquisitions while avoiding structures that destroy deal economics.

The difference between a well-negotiated acceleration clause and a weak one can be $500K, $2M, or even $10M depending on ownership, unvested equity, and exit valuation. That's not legal boilerplate—it's life-changing money.

In venture capital, the details aren't just important. They're worth millions.