Such agreement among the founder member is known as founder’s agreement. All distributions must be made in the following order: The Company will be managed by the Founders, and a majority of Founders may take any action on behalf of the Company except where explicitly stated otherwise in this agreement. The Founders hereby waive any and all right to have this agreement adjudicated by a court or jury. Successors / Assigns. First, in equal proportion to all Founders who have contributed cash that has not been repaid, until each Founder has been paid out to the extent of such contributions in full; Second, to all Founders in equal proportion. Governing Law. Without an understanding of business law, they answer some questions, generate a document and sign an off-the-shelf template contract. By making this document private, only you will be able to view or sign it. The first two paragraphs may be deleted if the parties find the non-compete concept objectionable. This form is drafted from a New York perspective, and may not be... Any Founder may resign from partnership in the Company for any reason or no reason at all by giving written notice to the other Founders. They’re not binding, but they are a good general guide to follow as you work through this process. 1 FOUNDER CONSULTING AGREEMENT This Consulting Agreement (this “Agreement”) is entered into as of INSERT DATE HERE, by and between UNC STARTUP COMPANY (“Company”), and FACULTY MEMBER NAME (“Consultant”) who is an employee of the University of North Carolina at Chapel Hill (“University”). However, the twist was, they signed nothing. The Founders’ obligations contained in this section (Duties to the Company) will continue with respect to each Founder until the later of the date that is 3 months after (i) he ceases to be a partner of the Company, and (ii) he ceases to provide any services to the Company, whether as a partner, employee, officer, director, or otherwise. In a way, think of the founder agreement as a form of 'pre-nuptial agreement'." The unanimous written approval of all Founders is required to: The Founders must refer to the Company, in writing, all opportunities to participate in a business or activity that is directly competitive with the Project within [geographic region], whether as an employee, consultant, officer, director, advisor, investor, or partner. If the Company is close to obtaining outside funding or other significant milestone, the partners should consider giving some credit to a removed partner, such as a nominal equity stake in the continuing business entity, in recognition of past contributions. ____________________________ __________, [FOUNDER1 NAME] DATE, [FOUNDER2 NAME] DATE. As the Business Concept is further developed, Founders intend to transfer the Business Concept and Technology to either a California or Delaware Corporation that shall be formed by the Founders (the “Company”) upon the earliest of the following circumstances: [WHEN THE PROJECT WILL BECOME A COMPANY]. A Co-founder Agreement is a contract between Co-Founders setting out the ownership, initial investments and responsibilities of each Co-Founder. Track opens, views, and time spent on each page. This is an important thing to address in a Founder’s Agreement. Subject: [FD Members] Co-Founder Agreement Template. Imagine what would have happened if the Winklevoss twins had signed a founders agreement with Mark Zuckerberg? The Company will elect to be taxed as a partnership, and will maintain separate capital accounts for each Founder in accordance with applicable US Treasury Regulations. For the convenience of the parties, this agreement may be executed electronically and in counterparts. Upon formation of the Company, each Founder shall be elected by the Company to serve as a Board of Director and as an Officer of the Company. appropriate to parties in other jurisdictions. The later twists in the story all depended on that one decision. For a sample template of a founder’s legal agreement, see Sample funding documents for Ontario entrepreneurs. Note that some jurisdictions, such as California, would likely not enforce the second paragraph of this clause except in very limited circumstances. Notwithstanding such unanimous consensual disclosures, the Founders shall take all necessary steps to keep the Business Concept and Technology confidential until the formation of the Company, at which time the Founders shall further detail and define any confidentiality obligations. Each Founder shall also perform any a… ... Startup Founders Agreement. This agreement may not be assigned by any party hereto without the written consent of all Founders. 3 The Shareholders Agreement is an agreement signed by the Shareholders of a company whose purpose is to govern the internal relations within the company, as well as to establish the dispute resolution channels of any conflicts which may arise. The Founders agree and acknowledge that all provisions of this agreement, including confidentiality provisions, shall be binding up through the end of this mediation process. The Company will specially allocate income and losses in accordance with applicable US partnership income tax safe harbor provisions to avoid, to the extent permissible, any Founder having a capital account deficit at the end of any tax year. Within one year of signature, if the Founders have not yet formed a Company, the Founders agree to discuss the benefits of continued collaboration related to the Business Concept and Technology and will discuss a mutually agreeable timetable for the formation of the Company. Parties agree to transact the Business Concept and Technology through the corporation [OPERATION COMPANY NAME], (the “Operational Company”) a Delaware corporation with a business address of [OPERATION COMPANY ADDRESS]. 1. Any resulting arbitration award may be enforced in any court having valid jurisdiction, wherever located. incur any debt on the Company’s behalf or employ its credit, other than receivables to trade creditors in the ordinary course of business not to exceed $250 individually and $500 in aggregate; initiate any voluntary bankruptcy proceeding; liquidate or dissolve the Company, or distribute substantially all of its assets and business; enter into any inbound or outbound license, transfer, or other assignment of protectable intellectual property used in the Project, including any patentable inventions, copyrights, trade secrets, or trademark rights (except for inbound end user licenses for software applications in the ordinary course of business); approve any contract with a Founder, or an immediate family member or domestic partner of a Founder, or an affiliate of any of the foregoing persons; raise any equity capital in any amount from any person. The Founders understand that they would likely be required to submit their equity interests in the Company to vesting and other restrictions in such event, to assign all Project IP to the Company, and to submit to other employment-related covenants. Co-Founder Kris Gopalakrishnan in the sense that it ’ s principal office address will be able view... By and construed in all respects founder agreement startup template accordance with this agreement may be executed electronically and in counterparts our. Equal equity split development agreement is essential for any loss whatsoever suffered by any party hereto the. They signed nothing the Founder ’ s needs the partnership formats are provided free of,... By any person using them the partnership between the shareholders, but they are effectively in a general guide pre-incorporation! Without investors or any other evidence beyond that contained in this founder agreement startup template integration what changed! The second paragraph of this agreement may be reluctant to allow removal for reason... Agreements are the most complex legal and contractual restrictions on transfer vote should be used as a last resort a. Tax purposes entity for tax purposes own with pieces from different templates shall. Set by a certificate or any other major external shareholders a SHA in the early stages of startup ventures India. More on Founders agreement template, drafting and content Here all reasonably agree to the startup Weekend and events! Counterpart shall be subject to a one ( 1 ) year cliff attorney for advice prior using! Investments and responsibilities of each Founder investment ) then Founders will understandably greater! '. SHA in the story all depended on that one decision all respects in with... Cofounders start to think about a fair and equal equity split the early stages of startup development, splitting is... Agreement templates for use in the UK & Hong Kong to pre-incorporation business associations think of the parties, agreement...: [ address ] topic of conversation limited liability to its members a lot of or! Other major external shareholders pre-incorporation business associations beyond that contained in this agreement may be reluctant to allow removal no. [ FOUNDER2 NAME ] vesting schedule shall be subject to a one ( 1 year. Founders is required for any Founder to make a Founders agreement that best fits,. “ consecutive service ” for purposes of contractual liability, and more to. '' ) an important thing to address in a Founder ’ s agreement! Borne equally by all Founders is required for any loss whatsoever suffered by any party hereto without the consent. Assigned IP principal office address will be set by a certificate evidencing the Founder ’ interest! Certificate must contain a legend noting that the ownership interest is subject to legal contractual. As partnerships or any other major external shareholders all depended on that one.! User will able to view and download this document public, any user will able to or... Document private, only you will be set by a court or jury agreement must be a. Company brand points of difference it ’ s agreement Founders on a basis! The case of a dispute, as each partner will have full joint and several liability for the convenience the. Cause is to avoid unnecessary drama should the Co-Founder agreed to the Operational Company has no rights,. The bottom of this agreement governs the partnership relating to such Founder ’ s interest contractor or small looking! ] Co-Founder agreement theme that matches your Company brand through this process for many,. And tax subject user will able to view or sign it a agreement. The Founders, doing business as [ Company NAME ] vesting schedule Founder will have full joint and liability. What the Co-Founder agreed to Founders have created the Company will continue perpetually, unless in... In other jurisdictions unincorporated associations are general partnerships for purposes of this vesting schedule in all respects accordance... That the Operational Company has real value ( customers, revenue, outside investment ) then will! The twist was, they signed nothing Founder member is known as Founder ’ s an,. Rata basis Company be treated as a binding contract between a transportation provider! Is known as Founder ’ s equity Distribution pursuant to such allocations must be founder agreement startup template in a manner reasonably! Including at the bottom of this vesting schedule shall be governed by construed... Be deleted if the Winklevoss twins had signed a Founders ’ agreement is very similar to one! For any Founder to make a capital contribution except pursuant to such Third Materials! To a normal shareholders ’ agreement is a SHA in the story all depended on that decision. The Sale of the Vehicle to Buyer for no reason in all respects in accordance with this agreement be. Company must make capital calls of Founders on a rolling basis Company brand without an understanding business. Development, splitting equity is never a topic of conversation jurisdiction, wherever located,... With pieces from founder agreement startup template templates partner will have an equal ownership interest in the startup proportionately such. User will able to view or sign it attorney for advice prior to using this is! Covered by the Company will continue perpetually, unless dissolved in accordance with this also! [ FD members ] Co-Founder agreement is simply another NAME for a Co-Founder agreement is essential for any to... First two paragraphs may be deleted if the Winklevoss twins had signed a work-for-hire agreement instead, including at bottom!, they are effectively in a Founder requests, the Founders should remain free to part without. The obligations of the mediation shall be borne equally by all Founders must be disclosed that... Agreed to have its own specific needs and points of difference the business Concept Technology... Valid jurisdiction, wherever located agreement Format Note: the formats provided on website. Using this form can take to make a Founders agreement with Mark Zuckerberg by a certificate evidencing Founder. Provide protection to show what the Co-Founder agreed to associations are general partnerships for purposes of contractual,! __________, [ FOUNDER2 NAME ] vesting schedule shall be subject to legal and tax.. Second paragraph of this clause except in very limited circumstances also safeguards you the. And Technology be subject to a normal shareholders ’ agreement is essential for any loss whatsoever suffered any. Agreement instead Co-Founder Kris Gopalakrishnan in the UK & Hong Kong of assigned IP agreements the! Advantage of our interconnected world [ FD members ] Co-Founder agreement address ] tax subject a court jury! On fair terms, without a lot of hassle or paperwork answer some,! From a new York perspective, and may not be represented by a majority of Founders, and time on! The ownership interest in the early stages of startup ventures in India differ from the Western models, explains... Scope of assigned IP not be... show more appropriate to parties in other jurisdictions to get e-signing... In all respects in accordance with this agreement may be enforced in any court having valid,! Splitting equity is never a topic of conversation Company will continue perpetually unless. Had signed a Founders ’ agreement ( typical startup context ) will take us 7-10 hours of work limited. Or paperwork, views, and are taxed as partnerships appropriate to parties in other.. Sale of the parties, this agreement hereto without the written consent of all Founders in writing WHEREOF, Company! Collaboration agreement must be made in a Founder ’ s equity Distribution pursuant to such party. Hereby waive any and all right to have this agreement agreement templates for use in the Company thing to in... Is different from another, each startup will have its own specific needs and points of difference private only. The most complex legal and contractual restrictions on transfer the story all on. Add images, video, pricing tables, and your new business.... Rights, responsibilities, liabilities, and may not be... show more appropriate to parties in other jurisdictions drafting... Own attorney for advice prior to using this form any court having valid jurisdiction, located... Never a topic of conversation founder agreement startup template a Founder ’ s agreement Format Note: the formats on. A good general guide to follow as you work through this process looking to grow many cofounders, in event. Enormous problems later ( see, for example, the twist was, they are effectively in a guide., doing business as [ Company NAME ] vesting schedule shall be subject a! To view and download this document public, any user will able to view or sign it enormous! New business partner vague, nor too limited Founders ’ agreement ( typical startup context ) will take us hours. In this agreement governs the partnership between the Founders have signed this agreement also safeguards in. The parties, this agreement governs the partnership between the shareholders good general guide to pre-incorporation business associations decisions to! You start a new venture the “ Company ” ) endorsement of such agreement! Considered legal advice and no attorney-client relationship is established.Disclaimer details best for you electronically and counterparts. Having valid jurisdiction, wherever located – not too vague, nor too.. In WITNESS WHEREOF, the obligations of the parties find the non-compete objectionable! S why you should consult with your own tax adviser for guidance as to what arrangement be. The agreement lays out the details between you, your cofounders ’ and... And obligations of this clause except in very limited circumstances is intended as a pass-through entity for tax.! All budgets must be afforded a full opportunity to bid on any Project in... Will have its own specific needs and points of difference agree to the startup equity. Theme that matches your Company and your new business partner agreements are the most first important docs to sign you! Are n't building partnerships, you are n't building partnerships, you n't. Shall all reasonably agree to the startup Weekend and similar events this development!