Single-Trigger Acceleration
An equity acceleration provision that causes unvested stock options or shares to vest immediately upon a single event — typically a change of control such as an acquisition — regardless of whether the employee continues working at the acquiring company.
What Is Single-Trigger Acceleration?
Single-trigger acceleration is a provision in an equity agreement that accelerates the vesting of stock options or restricted stock upon the occurrence of a single triggering event — most commonly a change of control (acquisition, merger, or sale of the company). When single-trigger acceleration is in effect, all or a specified portion of the employee's unvested equity vests immediately upon the deal closing, regardless of whether the employee stays with the acquiring company or is terminated.
Single-trigger acceleration is the most employee-favorable form of acceleration. It guarantees that the employee receives the full value of their equity grant if the company is sold, without requiring a second event like termination.
How Single-Trigger Acceleration Works
The Triggering Event
The most common trigger is a "change of control," which is defined in the equity agreement and typically includes:
- Acquisition of a majority of the company's outstanding shares
- Merger in which existing shareholders receive less than 50% of the surviving entity
- Sale of all or substantially all of the company's assets
- Change in the composition of the board of directors
The specific definition varies by agreement, and the precise language matters. Some agreements use broad definitions that capture a wide range of transactions, while others are narrower.
Acceleration Scope
Single-trigger acceleration may be full or partial:
- Full acceleration: 100% of unvested equity vests immediately upon the change of control.
- Partial acceleration: A specified percentage (e.g., 50%) or a specified number of months (e.g., 12 months of additional vesting) accelerates upon the change of control, with the remainder continuing on the original schedule or being assumed by the acquirer.
No Employment Condition
The defining characteristic of single-trigger acceleration is that it does not require any employment-related event (like termination) in addition to the change of control. The change of control alone is sufficient. This distinguishes it from double-trigger acceleration, which requires both a change of control and a subsequent termination.
Practical Implications for Startup Employees
Investors Often Resist It
Single-trigger acceleration can complicate acquisitions because acquirers rely on unvested equity as a retention tool to keep key employees. If all equity accelerates at closing, the acquirer loses this leverage and may need to issue new grants — which effectively increases the acquisition cost. For this reason, many investors and boards push back on single-trigger acceleration, especially for rank-and-file employees.
When You Might Get It
Single-trigger acceleration is most common for:
- Executives and co-founders: Who negotiated it as part of their employment agreements
- Key hires at early-stage companies: When the company needs to offer strong terms to attract talent
- Companies using single-trigger as a default: Some companies adopt single-trigger acceleration as a company-wide policy
The Negotiation Window
If single-trigger acceleration is important to you, negotiate for it before joining. It is much harder to add acceleration provisions after your equity agreement is signed. At the offer stage, you have maximum leverage to request favorable terms.
Tax Implications
When single-trigger acceleration vests a large number of options at once, the tax consequences can be significant. If you exercise the accelerated ISOs, the spread generates a large AMT adjustment. If the options are NSOs, the spread at exercise is ordinary income. In an acquisition, there may be limited time between vesting and the closing of the deal, creating compressed timelines for exercise and tax planning decisions.
How It Relates to Exercising Stock Options
Single-trigger acceleration directly affects when and how many options you can exercise. If your company is being acquired and your agreement includes single-trigger acceleration, all your unvested options will vest at closing — giving you the maximum number of options to exercise. The acquisition itself may determine the exercise outcome (options may be cashed out, converted to acquirer equity, or you may have a window to exercise before closing). Understanding your acceleration terms before an acquisition is announced helps you prepare for the tax and financial planning decisions that follow.