Deal Terms
Trigger
An event that activates a contractual provision — such as anti-dilution adjustments triggered by a down round, or acceleration triggered by an acquisition.
In venture capital documents, a trigger is an event that activates a contractual right or provision. Common triggers: anti-dilution triggers (a financing at a lower price per share triggers anti-dilution adjustments), acceleration triggers (acquisition triggers vesting acceleration — single-trigger means acquisition alone, double-trigger means acquisition plus termination), conversion triggers (automatic conversion of preferred stock to common at IPO), and clawback triggers (fund underperformance triggers GP obligation to return carry). Understanding what triggers exist in a company's charter and investor agreements is critical for founders evaluating transactions — certain deal structures can unexpectedly trigger provisions that change the economics significantly.