A Founders Agreement is a legal document that defines the rights, responsibilities, and ownership structure between startup co-founders.
It clearly outlines the equity distribution, decision-making process, IP ownership, and exit terms to prevent disputes in the future.
Having a properly drafted founders agreement ensures transparency, investor readiness, and business stability from the very beginning.
✅ Key Clauses in a Founders Agreement:
- Equity Ownership & Vesting Schedule: Defines how shares are divided and vested among founders.
- Roles & Responsibilities: Clarifies each founder’s operational role and authority within the company.
- Intellectual Property Rights: Ensures all IP developed belongs to the company, not individuals.
- Exit & Termination Clauses: Defines what happens if a founder exits or violates the agreement.
Note: It’s highly recommended for startups, especially during early stages or before raising funds, to execute a Founders Agreement to ensure long-term protection.