Angel Investors Network
    Glossary

    Single Trigger Acceleration

    Single Trigger Acceleration is a provision that automatically accelerates an employee's vested equity upon the occurrence of one specific event, typically a company acquisition or change of control. Unlike double-trigger acceleration, which requires both a change of control and employment termination, single-trigger provisions vest shares immediately when the triggering event occurs, regardless of whether the employee remains with the company.

    Single Trigger Acceleration is a vesting acceleration provision that automatically vests a portion or all of an employee's equity when one specific event occurs—usually a company acquisition, merger, or other change of control. The equity vests immediately upon that single triggering event, without any additional conditions like employment termination. This differs substantially from double-trigger acceleration, which requires both a change of control and a qualifying employment termination.

    How It Works

    When a company includes single-trigger acceleration in its stock option or RSU agreements, employees receive immediate vesting of their acceleration shares upon the triggering event. For example, if an employee holds options with 25% single-trigger acceleration and the company is acquired, 25% of their total grant vests immediately at closing, regardless of whether they continue employment post-acquisition. The employee then owns those shares outright and can typically sell them as part of the transaction.

    Why It Matters for Investors

    Single-trigger acceleration directly affects deal economics and post-acquisition employee retention. From an investor's perspective, understanding these provisions is critical because vested equity reduces the acquisition price available to shareholders. If significant equity accelerates at close, the purchase price is divided among more vested holders. This impacts your ownership percentage and exit proceeds. Additionally, companies with generous single-trigger provisions may struggle to retain talent post-acquisition, since employees have no continued vesting incentive to stay. As an angel investor, you should evaluate acceleration terms during due diligence and board discussions, as they influence both deal value and company performance after acquisition.

    Example

    A Series A startup grants an employee 10,000 stock options with a four-year vesting schedule and 25% single-trigger acceleration. Two years into employment, another company acquires the startup for $50 million. Upon acquisition closing, 2,500 options (25% × 10,000) vest immediately due to the single-trigger provision. The remaining 7,500 options follow their original vesting schedule. If the employee leaves immediately after acquisition, they keep the 2,500 vested options but forfeit unvested shares.

    Key Takeaways

    • Single-trigger acceleration vests equity upon one event (typically acquisition), not requiring employment continuation
    • Reduces acquisition price available to shareholders by expanding the vested equity pool at close
    • Can hurt post-acquisition retention since employees lose vesting incentives
    • Compare with double-trigger provisions when evaluating startup equity agreements and deal structures