Deal Terms
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Quick Answer
Provisions that speed up an employee's equity vesting schedule, typically triggered by acquisition or termination events.
Vesting acceleration allows unvested equity to vest faster than the original schedule, usually triggered by specific events. Single-trigger acceleration vests shares on a single event (usually acquisition). Double-trigger acceleration requires two events (acquisition plus termination). These provisions are especially important for founders and early employees who might be terminated after an acquisition.
In Practice
A founder has double-trigger acceleration: if the company is acquired (trigger 1) and the founder is terminated without cause within 12 months (trigger 2), 100% of unvested shares immediately vest.
Why It Matters
Acceleration provisions protect founders and employees from losing unvested equity in M&A events. They're heavily negotiated and can significantly impact acquisition deal dynamics.
VC Beast Take
Single-trigger acceleration is becoming table stakes for senior hires, but double-trigger remains the gold standard for founders. The dirty secret is that most acceleration clauses are poorly negotiated upfront when everyone's optimistic about working together forever. By the time you need acceleration protection, you have zero leverage. Smart founders negotiate acceleration scenarios during good times, not when the relationship is already souring or acquisition talks begin.
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Vesting acceleration allows unvested equity to vest faster than the original schedule, usually triggered by specific events. Single-trigger acceleration vests shares on a single event (usually acquisition). Double-trigger acceleration requires two events (acquisition plus termination).
Understanding Vesting Acceleration is critical for founders navigating the fundraising process. It directly impacts deal terms, valuation, and the relationship between founders and investors.
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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