Founders Agreement

 Founders Agreement is a legal document that outlines the terms and conditions between the founders of a company. It is a crucial document for startups and small businesses, as it helps prevent misunderstandings, conflicts, and disputes among the founders in the future. While the specifics of a Founders Agreement can vary, it typically includes the following key elements:

Founders' Roles and Responsibilities: Clearly define the roles and responsibilities of each founder within the company.

Equity Distribution: Specify the initial equity distribution among the founders. This includes the percentage of ownership each founder holds in the company.

Vesting Schedule: Establish a vesting schedule for the founders' equity. Vesting ensures that founders earn their equity over time, often with a cliff period at the beginning.

Decision-Making Process: Outline how decisions will be made within the company, including the process for resolving disputes among founders.

Founder Contributions: Detail the contributions each founder is expected to make to the company, whether they are financial, intellectual property, or other resources.

Compensation: Specify whether founders will receive salaries or other forms of compensation and how this will be determined.

Exit Strategy: Discuss potential exit strategies, such as the conditions under which a founder can sell their shares or what happens if a founder wants to leave the company.

Non-Compete and Confidentiality: Include clauses related to non-compete agreements and confidentiality to protect the company's intellectual property and sensitive information.

Dispute Resolution: Specify how disputes among founders will be resolved, whether through mediation, arbitration, or other means.

Intellectual Property Ownership: Clarify the ownership of intellectual property created by the founders during the course of their work for the company.

Termination and Buyout Clauses: Define the circumstances under which a founder can be terminated and outline the process for a buyout if a founder decides to leave.