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Ask HN: What happens to unvested equity in an acquisition?
If, for example, shares are vested over 4 years, but in the third year an acquisition occurs. What would happen to those unvested shares?
- spolsky 14y agoIt depends on what the options contract says, so read it and you'll see. Sometimes there is a provision for partial acceleration of vesting in the event of an acquisition.
- alanmhughes 14y agoIf you're asking from the perspective of evaluating an options package being offered to you or if you're planning to offer options to employees, I'd say it's pretty usual to expect all options to vest in the event of an exit/acquisition.
- tptacek 14y agoEither the unvested shares won't vest immediately and things will go as you expected them to before acquisition, or they will all vest immediately, or they will vest immediately but be subject to a buyback. I've had all three in contracts.
- dear 14y agoThanks all! So basically it should be in the contract how it should be handled in case of an acquisition.