Co Founder Vesting Agreement

Co Founder Vesting Agreement Template for England and Wales

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Key Requirements PROMPT example:

"I need a Co-Founder Vesting Agreement for my UK-based fintech startup with three founders, where shares vest monthly over four years starting March 2025, with a one-year cliff and accelerated vesting provisions in case of acquisition."

Document background

A Co-Founder Vesting Agreement is essential when establishing a new business venture with multiple founders under English and Welsh law. This document ensures that founders remain committed to the business by gradually earning their equity stakes over time, typically through a vesting schedule. It protects all parties by clearly defining what happens to unvested shares if a co-founder leaves, whether voluntarily or involuntarily. The agreement is particularly crucial for startups seeking investment, as investors often require vesting arrangements to ensure founder retention and commitment.

Suggested Sections

1. Parties: Identification of the co-founders and the company

2. Background: Context of the agreement and relationship between parties

3. Definitions: Key terms used throughout the agreement including Good Leaver, Bad Leaver, Vesting Period, etc.

4. Share Vesting Schedule: Detailed timeline and conditions for share vesting, including cliff periods and monthly/quarterly vesting

5. Clawback Provisions: Circumstances under which shares may be repurchased by the company

6. Termination Provisions: Circumstances and consequences of agreement termination

7. Share Transfer Restrictions: Limitations and conditions on transfer of unvested and vested shares

8. Representations and Warranties: Standard declarations by all parties regarding their capacity and authority

9. Governing Law and Jurisdiction: Specification of English and Welsh law as governing law and relevant courts

Optional Sections

1. Good/Bad Leaver Provisions: Detailed provisions for different treatment of shares based on circumstances of departure

2. Accelerated Vesting: Conditions under which vesting schedule may be accelerated (e.g., company sale, IPO)

3. Non-compete and Non-solicitation: Restrictions on competitive activities and solicitation of employees/customers

4. Tag-Along and Drag-Along Rights: Rights of shareholders in case of sale of shares to third parties

5. Dispute Resolution: Alternative dispute resolution mechanisms before court proceedings

Suggested Schedules

1. Schedule 1 - Vesting Schedule: Detailed breakdown of vesting timeline, milestones, and percentages

2. Schedule 2 - Share Valuation Methodology: Agreed method for valuing shares for buyback purposes

3. Schedule 3 - Company Articles Extract: Relevant sections of company articles relating to shares and transfer restrictions

4. Schedule 4 - Share Certificate Template: Template for issued share certificates and transfer forms

5. Schedule 5 - Deed of Adherence: Template for new shareholders to become bound by the agreement

Authors

Alex Denne

Head of Growth (Open Source Law) @ ��Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

alex.den.21@genieai.co

Relevant legal definitions

Clauses

Relevant Industries

Technology Startups
Professional Services
E-commerce
FinTech

Relevant Teams

Legal
Human Resources
Finance
Corporate Governance

Relevant Roles

Chief Executive Officer
Chief Technology Officer
Chief Operating Officer
Managing Director
Founder
Co-Founder

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Co Founder Vesting Agreement Template for England and Wales

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