Vesting acceleration
Last updated
Quick Answer
Vesting acceleration causes unvested carried interest to vest immediately on a defined event, such as a change of control or death.1
What it is
Acceleration provisions convert a future entitlement into a present one without the remaining service. Which events trigger it, and whether acceleration is full or partial, are negotiated at the management-company level and are frequently the most contested terms in the carry documentation.1
Operational context
What good looks like
Why It Matters
Acceleration converts a future entitlement into a present one without the remaining service, so which events trigger it is among the most contested terms in the carry documentation.1
Frequently Asked Questions
What is Vesting acceleration in venture capital?
Acceleration provisions convert a future entitlement into a present one without the remaining service. Which events trigger it, and whether acceleration is full or partial, are negotiated at the management-company level and are frequently the most contested terms in the carry documentation.
Why is Vesting acceleration important for startups?
Understanding Vesting acceleration is critical for founders navigating the fundraising process. It directly impacts deal terms, valuation, and the relationship between founders and investors.
Sources & References
- 1.morganlewis-carry-vesting — VC & PE Funds Deskbook — *Carried Interest: Vesting*VC & PE Funds Deskbook — *Carried Interest: Vesting*Morgan, Lewis & Bockius LLP(Vesting acceleration causes unvested carried interest to vest immediately on a defined event, such as a change of control or death.)secondary · T2 · vesting-clawback · structure
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