Deal Terms
Last updated
Quick Answer
Full or partial vesting acceleration that requires two events to trigger, typically a change of control plus termination of the employee.
Double trigger acceleration requires two separate events before accelerated vesting occurs: first, a change of control (acquisition or merger) of the company, and second, termination of the employee without cause or resignation for good reason within a specified period (usually 12-24 months) after the change of control. This structure is preferred by acquirers because it maintains retention incentives while still protecting employees.
In Practice
The CTO's equity agreement included double trigger acceleration: 100% vesting would accelerate only if the company was acquired AND she was terminated without cause within 18 months of closing. When the $2B acquisition closed and she was retained, her vesting continued on the original schedule.
Why It Matters
Double trigger is the market standard for executive equity protection in VC-backed companies. It balances employee protection against acquirers who need to retain key talent. Acquirers strongly prefer it over single trigger, which can create a windfall for departing employees.
VC Beast Take
The window period matters: 12 months is standard, but negotiating for 18-24 months provides more protection for employees who may face constructive dismissal through role changes or relocation after an acquisition. The definition of 'good reason' is equally important and often heavily negotiated.
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Double trigger acceleration requires two separate events before accelerated vesting occurs: first, a change of control (acquisition or merger) of the company, and second, termination of the employee without cause or resignation for good reason within a specified period (usually 12-24 months) after...
Understanding Double Trigger Acceleration is critical for founders navigating the fundraising process. It directly impacts deal terms, valuation, and the relationship between founders and investors.
Double Trigger Acceleration falls under the deal-terms category in venture capital. This area covers concepts related to the financial and legal terms that define investment agreements.
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