Founders' Agreement Playbook
Planning to start a startup or in the process of starting one now?
We have launched the Founders' agreement playbook which shares with some of the founders the key terms that should agree on at the early stage of the startup to protect each founder’s interest and prevent conflict down the line.
We have launched the Founders' agreement playbook which shares with some of the founders the key terms that should agree on at the early stage of the startup to protect each founder’s interest and prevent conflict down the line.
Why Is Having Founders’ Agreement Important?
Co-founder disputes are the main reason why startups fail.
A proper agreement would preempt certain common issues that occur between co-founders and prevent such problems from becoming too drawn-out and complicated, potentially avoiding hefty legal costs and headaches in the future.
A proper agreement would preempt certain common issues that occur between co-founders and prevent such problems from becoming too drawn-out and complicated, potentially avoiding hefty legal costs and headaches in the future.
State Responsibilities
Set out what each founder can or must do
Set out what each founder can or must do
Conflict Resolution
Resolve disputes between co-founders
Resolve disputes between co-founders
Ownership Structure
Stipulate the ownership split between founders
Stipulate the ownership split between founders
What should Founders’ Agreement include?
Parties to the Agreement
Indicates the legal names of founders at the start of the document as parties to the Founders’ Agreement
Indicates the legal names of founders at the start of the document as parties to the Founders’ Agreement
Roles and Responsibilities
How each founder will contribute to the company in terms of duties, obligations, hour commitments, and other responsibility areas
How each founder will contribute to the company in terms of duties, obligations, hour commitments, and other responsibility areas
Ownership Structure & Vesting
Set out the percentage of shares that each founder will own in the company
Set out the percentage of shares that each founder will own in the company
Intellectual Property
Defines what technology or intellectual property the founders intend to make use of in the startup and whether all founders own it collectively or not
Defines what technology or intellectual property the founders intend to make use of in the startup and whether all founders own it collectively or not
Termination
Circumstances of terminating the Founders’ Agreement between the co-founders
Circumstances of terminating the Founders’ Agreement between the co-founders
Governing Law and Dispute Resolution
Business laws and legal operations are necessary for startup foundation and operation.
Business laws and legal operations are necessary for startup foundation and operation.
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