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Vesting Acceleration

What is Vesting Acceleration?

Vesting acceleration is when someone's stock or options are vested ahead of the original schedule. Contracts may contain either a single-trigger or double-trigger vesting acceleration, a reference to the number of events that can lead to acceleration.

Startup founders, essential employees, investors, and advisors may be given stock or options as compensation. However, the equity grants generally have a vesting schedule—they’re released over time to help ensure the person stays focused on building the company. 

A single-trigger vesting acceleration clause allows the person to partially or fully vest after a single event, such as the sale of the company or if the person is fired without cause. It’s rarely included in contracts for anyone but the founders and investors.

As a founder, you may want to be cautious about including single-trigger vesting acceleration clauses in contracts if you want to raise money from investors. From an investor’s perspective, the clause could make the company a less-appealing acquisition target.

Double-trigger acceleration clauses can similarly accelerate stock and option vesting schedules, and may be more commonly accepted as a standard practice. These depend on two triggers, such as the company’s sale and involuntary termination of the employee within a certain period after the sale. 

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