Founders’ Agreements

Founders’ Agreements are contracts between co-founders of a startup, setting forth the co-founders’ agreement on important issues relating to the venture.  You can put whatever you want in a Founders’ Agreement but the most common issues covered are: equity splits and vesting of founders’ stock, transfer restrictions on founders’ stock, non-solicitation and confidentiality obligations, voting, and tag-along rights.

Drafting a Founders’ Agreement is a really good idea for a couple of reasons: first, it helps co-founders clarify and crystallize their plans for the venture, and second, it helps to prevent against (or minimize) disputes later.  Co-founders often find the exercise of writing a Founders’ Agreement helpful because it can uncover differences in opinion that may not have been apparent, and the co-founders can then proactively address those issues.

- Claire Kalia

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