What is a Founders’ Agreement?

A Founders’ Agreement describes the relationship among the founders of a new company.

Typical language would include:

  • What services will the founders provide to the company? Will they work full time or part time? Will they be paid as employees or only receive equity?
  • How may shares will each founder receive? When will s/he receive the shares – upfront or according to a vesting schedule?
  • What happens to the technology developed by each founder? Who owns it: the company or the founder?
  • Can a founder start a competing or similar company?

The agreement should begin a discussion about how the business will be run by the founders before the they start doing business together. The process of negotiating this agreement may help you decide whether you can work with your co-founder before you invest significantly into the business.

Get your Founders' Agreement here.

 


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