FOUNDER’S AGREEMENT

A Founder’s Agreement is a legal document that outlines the key terms and expectations between the co-founders of a startup or business.

• Clarify Roles and Responsibilities: It defines the specific roles, duties, and expectations of each founder to avoid misunderstandings and conflicts down the line. This helps establish who is responsible for what within the company.

• Set Equity Ownership and Vesting Terms: The agreement clearly states how much equity each founder owns and outlines the vesting schedule, ensuring that ownership is earned over time. This prevents a situation where a founder who doesn’t contribute significantly retains full ownership.

• Provide a Framework for Decision-Making: It sets guidelines for how decisions are made, particularly when disagreements arise. This helps prevent gridlock or delays in important business matters.

• Protect Intellectual Property: It ensures that any intellectual property created by the founders belongs to the company, rather than individual founders, protecting the company’s assets.

• Outline Conflict Resolution Mechanisms: The agreement provides a clear process for resolving disputes between founders, which can prevent the company from being negatively affected by internal conflicts.

• Establish Exit and Termination Terms: It defines the procedures and conditions under which a founder can exit the company or be removed, as well as how their equity will be handled.

• Foster Trust and Accountability: By laying out clear expectations, the agreement builds a foundation of trust between founders and sets a standard of accountability, ensuring that all parties are aligned in their goals.