The Double-Trigger Dilemma: What Startup Employees Miss When Equity Vests but Doesn’t Liquidate 

Equity compensation is part of the Bay Area’s cultural DNA. For decades, startups from San Jose to San Francisco have attracted top talent with the promise of stock options and RSUs that could one day transform into life-changing wealth. But behind the glossy recruiting pitch is a structural catch that many employees discover too late: the double-trigger dilemma. 

What Is a Double-Trigger? 

Most employees understand the basics of vesting: put in your years of service, and your stock vests over time — that’s the first trigger. 

But many late-stage companies, particularly in the Bay Area, also include a second trigger: a liquidity event such as an IPO or acquisition. Until that happens, your vested stock is a number on a spreadsheet, not money in your bank account. 

Lessons from Bay Area Giants 

The double-trigger isn’t theoretical. It has defined the experience of thousands of local employees: 

• Airbnb: Before its 2020 IPO, employees spent years with fully vested RSUs they couldn’t sell. Many had already made lifestyle decisions — mortgages, private school tuition — based on expected equity value, only to face delays when the company postponed its IPO after the pandemic hit. 
• Stripe: Still private as of 2025 despite being valued north of $50 billion, Stripe employees have been vesting stock for nearly a decade. Some early hires left the company with no clear path to liquidity, relying on secondary sales and company-run tender offers to unlock any value. 
• Instacart: Employees who joined in its early growth years saw equity vest but had to wait until the company finally went public in 2023. By that time, private valuations had reset downward, leaving some employees with far less than they expected. 
• Dropbox (pre-IPO): Employees endured years of paper wealth before finally seeing liquidity at IPO — only to watch the stock trade below private valuations, shrinking payouts. 

These stories are common across the Bay Area: companies scale to unicorn or decacorn status, stay private for years, and leave employees with illiquid equity despite impressive vesting schedules. 

The Hidden Tax Trap in California 

California’s high tax rates amplify the problem. RSUs structured without careful attention to the double-trigger can create taxable income upon vesting, even without liquidity. Employees here may find themselves owing state and federal taxes on equity they can’t sell — a scenario that has forced some to take out loans or liquidate other assets just to cover tax bills. 

Why Bay Area Companies Favor Double-Triggers 

For companies, the structure makes sense: 

• Retention in a competitive market. With top talent always in demand, double-triggers encourage employees to stay until a liquidity event. 
• Managing mega-valuations. Companies like Stripe and Databricks, flush with late-stage private capital, can afford to delay IPOs — but need mechanisms to control when stock turns into real ownership. 
• Cap table discipline. Preventing premature exercises or sales keeps the company’s ownership structure clean during long private runs. 

What Bay Area Employees Can Do 

If you’re in the Bay Area startup ecosystem, it pays to look past the headlines: 

1. Scrutinize your grant documents. Don’t assume all equity is created equal — double-triggers can dramatically change outcomes. 
2. Model California-specific tax scenarios. High marginal rates mean the stakes are higher here. 
3. Plan as if liquidity is distant. Many unicorns now stay private for 10–12 years; treat equity as speculative upside, not guaranteed pay. 
4. Ask about secondary liquidity. Many Bay Area giants — including Airbnb and Stripe — have quietly offered tender offers or structured sales. Knowing how these work could provide early access to value. 

The Bottom Line 

The Bay Area has minted extraordinary wealth through equity — but it has also left many employees frustrated when vested stock failed to translate into real financial security. The double-trigger dilemma is the hidden fine print of Silicon Valley’s promise: vesting doesn’t equal ownership, and ownership doesn’t equal liquidity. 

Employees who understand this dynamic — and plan accordingly — will be far better prepared to turn Bay Area equity into lasting wealth when opportunity finally knocks. 

How Summitry Helps 

At Summitry, we’ve guided many Bay Area professionals through the complexities of equity compensation — from double-trigger RSUs and pre-IPO liquidity planning to tax optimization in California’s high-rate environment. Our advisors combine deep technical knowledge with a local perspective, because we’ve seen firsthand how Airbnb’s IPO, Stripe’s delayed liquidity, and Instacart’s valuation reset affected employees across the Bay Area. 

We know the common pitfalls. We know the opportunities. And we know how to translate paper wealth into a long-term financial strategy that supports life goals — whether that’s buying a home in San Mateo, funding your children’s education, or planning an early retirement. 

If you’re navigating equity compensation at a Bay Area startup, Summitry is the partner who can help you chart a smarter course. 

Disclosure: The securities identified and described do not represent all of the securities purchased, sold or recommended for client accounts.  The reader should not assume that an investment in the securities identified was or will be profitable. There can be no guarantee that a successful or profitable outcome can be achieved. Summitry does not offer tax advice.