Company setup and early instruments
Founder acceleration
Single-trigger vs double-trigger vesting — who gets unvested shares when the company is sold or a founder is fired.
Acceleration moves unvested shares forward on certain events. It lives in the stock purchase agreement or a separate amendment. Do not rely on a handshake "we'll take care of you in an exit."
Investors dislike large automatic vesting on sale. Buyers dislike a chunk of the cap table popping vested on announcement. That is why the usual compromise is double-trigger, not single-trigger.
The big idea
| Type | Trigger | Typical use |
|---|---|---|
| Single-trigger | Change of control alone (acquisition) | Aggressive for founders; investors dislike large automatic vesting on sale |
| Double-trigger | Sale and termination without cause / resignation for good reason within a window | Common compromise for employees and sometimes founders |
| Partial acceleration | e.g. 25–50% of unvested on double-trigger | Negotiated middle ground |
Trade-off
Prefer double-trigger (or modest partial acceleration) over single-trigger for founder stock if you want a clean Series A. Single-trigger can scare buyers and investors because a large block vests on announcement and may mess with deal incentives. Save single-trigger fights for rare cases with counsel.
Walking through month 18
Same setup as the reverse vesting walkthrough: B has 3,125,000 unvested shares at month 18.
- B resigns. Double-trigger does not fire. Outcome unchanged: company repurchases the 3,125,000.
- The company is acquired at month 18 and B is terminated without cause, with a double-trigger covering 50% of unvested shares. B additionally vests
0.5 × 3,125,000 = 1,562,500shares.
Always read which triggers apply to leave vs sale. Acceleration on resignation is a different promise from acceleration on a deal.
Common mistakes
- Single-trigger on all founder stock. Complicates M&A and financings.
- Assuming acceleration covers a voluntary quit. Most double-trigger clauses need a sale and a qualifying termination.
- Leaving it verbal. If it is not in the agreement, it will not be in the closing checklist.
Check yourself
A founder with double-trigger (50% of unvested) resigns at month 18, with no sale. How much extra vests?
None. Resignation alone is not a double trigger.
Why do investors push back on single-trigger founder acceleration?
A sale then vests a large block automatically, which can distort deal incentives and surprise a buyer.
Key takeaways
- Single-trigger vests on sale alone; double-trigger needs a sale and a qualifying termination.
- Prefer double-trigger or partial acceleration for cleaner financings and M&A.
- Read the clause: leave, sale and "good reason" are different switches.
- Put it in the stock agreement, not in Slack.
Further learning
Next, co-founder agreements for deadlock and departure rules beyond the stock docs.