Distinguishing single and double trigger events
Single trigger acceleration vests some or all unvested equity immediately when one specified event happens, most commonly a sale or change of control of the company. Double trigger acceleration requires two events to both occur, typically a change of control and the holder being terminated without cause or leaving for good reason within a set window afterward, often 12 months, a structure closely related to the base vesting schedule that acceleration modifies.
Investors generally dislike single trigger acceleration for employees because it can make a target company less attractive to a buyer, since key people's equity fully vests regardless of whether they stay on after the deal. Double trigger is far more common in negotiated term sheets because it keeps the incentive to stay through and after the transition that follows an exit.
Acceleration math after an acquisition
A senior employee has vested 50% of a four year grant when the company is acquired. With double trigger acceleration covering 12 months on qualifying termination, if the acquirer terminates the role within 12 months of the deal, an extra 12 months of vesting accelerates immediately, taking them from 50% to 75% vested, rather than only the roughly 25% they would have reached by natural vesting alone in that time.
| Scenario | Vested at deal | Trigger event | Result |
|---|---|---|---|
| No acceleration clause | 50% | None | Continues normal monthly vesting |
| Single trigger, full | 50% | Change of control | 100% vests immediately at deal |
| Double trigger, 12 months | 50% | Change of control + termination within 12 months | 50% plus 12 months = 75% vests |
Acceleration for founders
Founders often negotiate their own reverse vesting agreements to include acceleration terms, since they are the ones most exposed to being pushed out after an acquisition. A common founder-friendly term is double trigger acceleration of all remaining unvested shares, rather than a fixed number of months, so the founder is fully vested if removed after a sale.
Questions on single and double trigger terms
- Which is more common, single or double trigger?
- Double trigger is far more common in venture backed companies, particularly for founder and executive vesting agreements.
- Does acceleration apply automatically?
- No. It only applies if it is written into the vesting agreement, option plan or a separate side letter.
- Can acceleration terms be added after a grant is made?
- Yes, with agreement between the company and the holder, often negotiated as part of a funding round or executive hire.
General information for founders, not legal or tax advice. Thresholds and rates change, so confirm the current position with an adviser in the relevant country before granting.