Author: Maria Castillo Dominguez

At a pre-IPO startup, vesting on a schedule does not automatically mean your equity has value you can access. Double trigger vesting changes the picture in ways that are worth understanding before you make career or financial decisions based on equity you believe you have earned.

  If you work at a private company or pre-IPO startup, your RSU grant agreement may contain language you have not fully examined. Double trigger vesting is one of the most important and least-discussed structures in startup equity compensation planning. It affects when you can actually access your shares, and in some scenarios, whether you ever can. This post explains what double trigger vesting is, why companies use it, what it means for your financial planning, and what questions to ask before making any decisions that factor in your unvested or vested equity at a private company.

What Double Trigger Vesting Means

Standard RSU vesting at a public company has one trigger: time. Stay employed long enough, and shares vest. With double trigger vesting, there are two separate conditions that must both be met before shares vest and become accessible to you. The first trigger is typically time-based, just like a standard vesting schedule. You remain employed at the company for a defined period, and shares accrue over that time. The second trigger is a liquidity event. This is usually a company acquisition, merger, or an initial public offering. Until this event occurs, the shares that have technically accrued under the first trigger remain inaccessible. You cannot sell them, transfer them, or in many cases even know with certainty what they will be worth.

What Happens to Your Equity in an Acquisition

This is where double trigger vesting becomes most consequential for individuals, and where the details of your specific grant agreement matter. In an acquisition, outstanding RSUs may be handled in several ways. The acquiring company may assume or convert the awards into its own equity plan. Unvested RSUs may be cashed out based on the transaction value or continue vesting under new terms. In some cases, unvested shares may be forfeited if vesting conditions are not met, depending on the terms of the equity plan and the transaction. A double trigger provision generally provides that if a change in control occurs and you experience a qualifying termination (such as termination without cause or resignation for good reason) within a specified period, unvested shares will accelerate and vest. Not all grant agreements include this provision. Even when they do, the definitions of qualifying termination and the applicable time window determine how it applies. Reviewing your grant agreement is necessary to understand how your equity will be treated in a transaction.

What Happens If the Company Never Has a Liquidity Event

This is the scenario that is least often discussed but most worth understanding. Not every startup reaches an IPO or acquisition. Some companies operate privately for many years. Others shut down, merge on unfavorable terms, or simply never create a liquid market for their shares. If you have RSUs at a private company and no liquidity event occurs, those shares may not produce any financial value for you regardless of how long you stayed or how many shares technically accrued. This does not mean your time was not compensated. Your salary, experience, and career growth were real. But the equity portion of your compensation remains theoretical until a liquidity event occurs. This is an important distinction when thinking about total compensation. At a public company, RSUs that vest have immediate, measurable value. At a private company with double trigger vesting, the equity portion of your compensation involves meaningful uncertainty that is worth factoring into your financial planning rather than treating as a given.

Questions to Ask About Your Grant Agreement

If you are at a private company and have not reviewed your grant agreement in detail, these are the questions worth finding answers to: Does my grant include double trigger vesting? Not all private company RSU grants include this provision. Some grants provide no acceleration, while others include single-trigger acceleration in specific circumstances. Your grant agreement will define how vesting is treated in a change in control. What qualifies as a liquidity event under my agreement? The definition matters. Some agreements specify only an IPO. Others include acquisitions, mergers, or secondary sales. The broader the definition, the more scenarios could trigger your second condition. Is there a change-in-control acceleration provision? If you are terminated or your role changes materially following an acquisition, do your unvested shares accelerate? If so, what is the window during which that protection applies? What happens to my vested shares if I leave before a liquidity event? If you leave before a liquidity event, your vested but unsettled RSUs typically remain subject to the company’s settlement terms. You may need to wait until a liquidity event to receive shares or cash, and the outcome depends on your specific grant agreement.

  When you are granted RSUs, your grant agreement determines how and when the shares become yours. This matters to you because until they vest, the shares are not yours.  

  Vesting schedules vary by company. This post walks you through the most common vesting schedules that you might encounter, what each one means for your personal financial planning, and what to watch out for with each type.

What Vesting Actually Means

In simple words, vesting is how you earn your shares over time. On your grant date, you are awarded a specific number of shares. But you do not own them yet. They become yours over time by meeting specific conditions, usually staying employed at the time of vesting. In some cases, particularly with private companies, you might need to meet more than one condition, usually that the company gets acquired or has an IPO. This is called double trigger vesting, and I will expand more on this in the next post. Each time new shares vest, two things happen: you own the shares outright, and you owe income taxes. Vesting is not just the day you receive the shares, it is also a tax event, and planning around it is important.

The Four-Year Vesting: One Common Structure in Tech

The most common vesting schedule in tech is a four-year schedule with a one-year cliff. This means that you do not have any shares vesting for the first year, then a portion vests at your one-year mark with the company. If you leave before your one-year anniversary, you leave with no shares. After the first year, the remaining shares vest gradually, typically monthly or quarterly, over the following three years. While four years is standard, the vesting structure (meaning, how many shares you receive on different vesting dates) varies significantly by company. For example, Amazon back-loads its vesting with a higher portion vesting in years three and four, Google front-loads its vesting with more shares vesting in year one and fewer shares gradually vesting over the next years, and Meta vests evenly with 25% vesting after the first year and quarterly over the next three years.

Performance-Based Vesting

Your company might offer you shares based on performance, tied to either company-wide metrics such as revenue targets, or to individual performance goals. So, the number of shares you receive can vary. If you hit your performance goals, they will deliver 100% of the shares, if you exceed your target, they might deliver more shares (although this is not always true), but if you fall short, you are likely to receive fewer shares, or even no shares at all. Performance-based grants are more difficult to plan around because the number of shares (and therefore, your income) is not fully predictable. If a meaningful portion of your equity compensation is tied to performance metrics, understanding the specific terms of your grant matters for your equity compensation financial planning.

Double-Trigger Vesting: What It Means at Private Companies

Double-trigger vesting is most common at private companies and pre-IPO startups. It means two separate conditions must be met before shares vest. The first trigger is typically time-based: you stay at the company long enough. The second trigger is usually a liquidity event, such as an acquisition or an IPO. This structure has completely different implications. You can work at a private company for years and still have no shares because the second trigger has not occurred. And if no liquidity event ever happens, the shares may have no value. Double-trigger vesting deserves its own dedicated post, which is the next one in this series. If you are currently at a private company or startup, that post is worth reading carefully.

Refresher Grants

One more vesting concept worth understanding is the refresher grant. As your original RSU grant vests out, many companies issue additional grants to keep your equity balance meaningful and maintain retention incentives. Refresher grants have their own vesting schedules, typically shorter than the original grant. Over time, you may find yourself holding multiple overlapping grants, with each having a different vesting schedule. This layering effect is one of the reasons RSU planning becomes more complex the longer you stay at a company. Keeping a clear picture of all your grants: their grant dates, vest dates, and current values, is a must to properly plan your finances.

How to Find Your Vesting Schedule

You can find the details of your vesting schedule on your grant agreement. If you cannot locate it, your company’s equity plan administrator or HR team can provide it. Many companies also make grant details available through an equity management platform such as Carta, Fidelity, Morgan Stanley, or Schwab. If you have multiple grants, each one may have its own schedule. Do not assume they are all structured the same way.

If you work in the tech world, it is highly likely that you receive RSUs as part of your compensation. But what is really an RSU and what does it mean for your personal finances? This first post is the foundation of a series of RSU blogs. In future posts, I will cover vesting schedules, double trigger vesting, taxation and things to watch out for, and more.  

What RSU Stands For

RSU stands for Restricted Stock Unit. The name tells you most of what you need to know: it is a share of the company, but with restrictions on it. What is the restriction? Usually, time. You work long enough to make it to the vesting date and the shares are yours.

Key Concept RSUs are a promise your employer makes to give you shares of the company in the future, contingent on specific conditions. Until the shares vest, you do not own them, so you cannot sell or do anything with them.  

How RSUs Work, Step by Step

The typical structure of the RSU lifecycle is as follows:

• Grant date: Your employer awards you a specific number of shares. You do not own them yet. This is just a promise to give you the shares at a specific time in the future.
• Vesting schedule: A vesting schedule determines when you will receive the shares. The most common vesting I see in tech is four years with a one-year cliff, meaning nothing vests during the first year, a portion vests at the one-year mark, and the rest vests gradually after that.
• Vesting date: This is the date the shares become officially yours (yay!). If no other restriction exists (like a blackout trading period), you now have full power to decide what to do with them. From a tax perspective, this is one of the most important dates: the IRS treats this as taxable compensation to you on the day you receive them. So, yes, you now owe taxes.
  I wrote a full post about RSU tax withholding and what to watch out for here.
• Post-vesting date: Once shares vest, you decide what to do with them. You can sell immediately, hold them, or sell a portion and hold the rest. Each choice has different tax implications.

Key Concept The vest date is when you owe income taxes. Even if you hold the shares and the price falls the next day, you already have a tax obligation based on the value the day the shares vest.

What RSUs Actually Mean for Your Finances

RSUs can be a great wealth generator if used wisely. They are not a bonus, they are part of your compensation for showing up and doing a good job. I find that many women I work with don’t treat RSUs as part of their cash flow and regular compensation when they earn the shares, mostly because it is not cash being deposited to your bank account, so it doesn’t feel like available cash flow. But it is. RSUs can make daily cash flow feel more complicated. This is also one of the reasons equity compensation planning matters, understanding what you have and building a clear strategy around it can change the trajectory of your finances.   Things to Watch Out For:

• RSUs create taxable income at vesting whether you sell or not. Make sure you understand what your employer withholds and whether it covers your actual tax obligation.
• Holding too many shares in your employer’s stock means both your income and your savings are tied to the same company. If the company struggles, both are affected at the same time.
• Unvested RSUs are not guaranteed. If you leave the company or are laid off, you lose any shares that have not yet vested.
• Grant agreements have specific terms. Not all RSU grants are structured the same way. Read yours carefully, especially if you work at a private company.

What Comes Next in This Series

This post is the foundation. The rest of this series goes deeper into each part of the RSU picture: Next: RSU Vesting Schedules Explained — we break down every major vesting structure you will encounter in tech, including cliff vesting, back-loaded schedules, performance-based grants, and double-trigger vesting at private companies. RSU Series by Valoria Wealth Management Post 1 of 5: What Is an RSU? (You are here)  | Post 2: Vesting Schedules Explained  | Post 3: Double Trigger Vesting at Private Companies  | Post 4: The RSU Tax Bill Nobody Warned You About  | Post 5: RSUs and Cost Basis

The Valoria Perspective RSUs are one of the most powerful wealth-building tools available to women in tech. They are also one of the most misunderstood. The goal of this series is to change that. Understanding what you have is the first step toward using it well.

Not sure what to do with your RSUs?

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