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A Founders Agreement is a binding contract that business partners create when starting a company together. It spells out how they'll split ownership, make key decisions, and handle their roles and responsibilities. Think of it as the ground rules for how co-founders will work together and what happens if someone wants to leave.

This vital document typically covers equity distribution, intellectual property rights, and each founder's financial commitments. It helps prevent future disputes by clearly defining vesting schedules, voting rights, and exit procedures. While not legally required in the U.S., having one in place can save founders from costly legal battles and protect their business relationships down the road.

Create a Founders Agreement right when you start planning your business with partners, before any money changes hands or work begins. This timing is crucial because early decisions about ownership, roles, and responsibilities become much harder to negotiate once the business is running and valuable.

The agreement becomes especially important when founders bring different assets to the table - like one person contributing cash while another brings expertise or intellectual property. It's also essential when founders plan to keep their day jobs initially, work remotely, or contribute unequally to the startup. Getting these terms in writing helps prevent misunderstandings that could derail the business later.

• Founder Equity Agreement: Focuses specifically on ownership stakes, share distribution, and future equity allocation
• Founder Employment Agreement: Details roles, compensation, and work commitments when founders also serve as employees
• Co Founder Vesting Agreement: Outlines how founders earn their equity over time to ensure long-term commitment
• Co Founder Separation Agreement: Handles the clean break when a founder exits, including equity buyouts and non-compete terms
• Founder Shareholder Agreement: Governs voting rights, share transfers, and broader stockholder relationships

• Co-Founders: The primary parties who draft, negotiate, and sign the agreement, typically including all individuals starting the business together
• Corporate Attorneys: Legal professionals who review and refine the agreement to ensure it's legally sound and protects all parties' interests
• Business Advisors: Help structure key terms around equity, roles, and decision-making processes
• Board Members: Often review and approve the agreement, especially in venture-backed startups
• Potential Investors: May review the agreement during due diligence to understand founder relationships and commitments

• Basic Information: Gather full legal names, contact details, and roles of all founders involved
• Ownership Structure: Define exact equity percentages, vesting schedules, and any special share classes
• Contributions: List what each founder brings - cash, intellectual property, expertise, or other assets
• Decision Rules: Outline voting rights and how major company decisions will be made
• Exit Strategy: Plan for scenarios like founder departure, company sale, or dissolution
• Work Expectations: Document time commitments, responsibilities, and performance standards
• Legal Review: Use our platform to generate a legally sound agreement, then review with all founders

• Identification Section: Full legal names of all founders and the company, with complete contact details
• Equity Structure: Detailed breakdown of ownership percentages, share classes, and vesting schedules
• Management Rights: Decision-making processes, voting thresholds, and board composition rules
• Intellectual Property: Assignment of existing and future IP rights to the company
• Non-Compete Terms: Restrictions on competing activities and timeline limitations
• Exit Provisions: Procedures for founder departure, company sale, or dissolution
• Dispute Resolution: Methods for handling disagreements and applicable jurisdiction
• Amendment Process: Procedures for modifying the agreement with consent requirements

A Founders Agreement differs significantly from a Business Acquisition Agreement. While both deal with company ownership, they serve distinct purposes and come into play at different stages of a business's lifecycle.

• Timing and Purpose: Founders Agreements establish initial company relationships at startup, while Business Acquisition Agreements facilitate the purchase of an existing business
• Parties Involved: Founders Agreements are between co-founders starting a new venture together; Business Acquisition Agreements are between buyers and sellers of established businesses
• Scope of Terms: Founders Agreements focus on equity splits, roles, and decision-making rights; Business Acquisition Agreements detail purchase price, asset transfers, and liability assumptions
• Duration: Founders Agreements govern ongoing relationships throughout the company's life; Business Acquisition Agreements primarily cover the one-time transaction and transition period