Single and Double Trigger Vesting Acceleration: What founders and employees should know

Cody: When we talk about acceleration, what does that mean? Is there a difference there? Is that an add-on to the typical vesting schedule?

Nick: Exactly. Acceleration is something that is more common for key executives and senior hires and occasionally for early hires as well, as well as founders. There are two common types of acceleration.

There's single trigger acceleration and there's double trigger acceleration. Single trigger acceleration kicks in at either the termination event-- an involuntary termination typically if they're fired without cause or leave for good reason, which are defined terms typically in the stock option agreement. Double trigger would be if one of those first triggers occurs at or around an exit event, a sale most commonly.

Cody: I've always thought of double trigger as kind of being a happy medium where it doesn't usually make sense in most cases for people to have single trigger acceleration in the event of a change of control, Meaning if the company is acquired, they automatically are fully vested. But it does strike a balance where if there's double trigger acceleration, the employees, the team members have some level of protection that they can't just be terminated right after a company gets acquired and walk away with nothing. Seems to be a happy medium. I think there are also very good reasons thinking that through: why wouldn't everybody just get accelerated when a company gets acquired? It's a great outcome. It's good exit, but obviously acquirers want people to stick around usually that they're not acquiring the company for what's been built, but presumably to continue building and continue growing after the fact.