Deal Terms
Last updated
Quick Answer
A provision that immediately vests some or all of a founder's unvested shares upon certain trigger events like acquisition or termination.
Founder vesting acceleration is a contractual provision that causes unvested founder shares to vest immediately upon specified events. Single-trigger acceleration vests shares upon one event (typically an acquisition). Double-trigger acceleration requires two events (acquisition plus termination). Acceleration protects founders from losing unvested equity when their company is acquired, especially if they're terminated post-acquisition.
In Practice
The founder had double-trigger acceleration: 50% of unvested shares would vest immediately if the company was acquired AND she was terminated without cause within 12 months of the acquisition.
Why It Matters
Acceleration provisions are critical for founders selling their companies. Without acceleration, a founder who gets fired after an acquisition could lose years of unvested equity — the exact scenario double-trigger was designed to prevent.
VC Beast Take
Single-trigger is great for founders but terrifying for acquirers. Double-trigger is the standard compromise that protects founders without giving them a golden parachute to walk away.
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Founder vesting acceleration is a contractual provision that causes unvested founder shares to vest immediately upon specified events. Single-trigger acceleration vests shares upon one event (typically an acquisition). Double-trigger acceleration requires two events (acquisition plus termination).
Understanding Founder Vesting Acceleration is critical for founders navigating the fundraising process. It directly impacts deal terms, valuation, and the relationship between founders and investors.
Founder Vesting 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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