Any future agreement that requires an ownership interest in the Business Concept and Technology and related intellectual property to be transferred to a third party before the formation of the Company must be agreed upon by each Founder. The Founders hereby waive any and all right to have this agreement adjudicated by a court or jury. You should consult with your own attorney for advice prior to using this form. & Prof. Code § 16600, et seq., in no circumstance shall the underlying business concept be considered confidential upon termination of this Agreement. Section 1.1 Each Founder shall grant and assign to the Company immediately upon its formation all of his or her right, title, and interest in and to the Business Concept and Technology (including all right, title and interest to intellectual property thereto), including all ideas (however formed or unformed) and labor and/or work product that results from any task or work performed by the Founder that relates to the Business Concept or Technology for the full term of such rights. This document is a short form co-founder agreement intended for use by the founders of a new startup who wish to provide for some level of claw-back of a co-founder’s initial shareholding if he or she ceases to work for the company (whether as an employee or contractor). The Company will continue perpetually, unless dissolved in accordance with this agreement. Any elections or decisions relating to such allocations must be made in a manner that reasonably reflects the intent of this agreement. (a) contributions and inventions, discoveries, creations, developments, improvements, works of authorship and ideas (whether or not protectable under patent, copyright, or other legal theory) of any kind that are conceived, created, developed or reduced to practice by any Founder, alone or with others, while such Founder is a member of, or provides services to, the Company, regardless of whether they are conceived or made during regular working hours or at the Company’s place of work, that are directly or indirectly related to the Project, result from tasks assigned to a Founder by the Company, or are conceived or made with the use of the Company’s resources, facilities or materials; and (b) any and all patents, patent applications, copyrights, trade secrets, trademarks (whether or not registered), domain names and other intellectual property rights, worldwide, with respect to any of the foregoing. 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. Just like one business is different from another, each startup will have its own specific needs and points of difference. Founder Collaboration Agreement Startup Law Resources Incorporate. That’s why at SeedLegals, we’ve made it free for startups to create founders’ agreements as part of our 30 day trial. Before you create your founders agreement template, you must discuss with your co-founders to finalize the most important issues like management, ownership, compensation, the board of directors, investments, and more. Assignment. This agreement governs the partnership between the Founders, doing business as [company name] (the “Company”). This is an important thing to address in a Founder’s Agreement. Founders' Agreement Other than as explicitly provided herein, no Founder will have any duty to the other Founders or to the Company, including any fiduciary duty, and including any duty to refer business opportunities to the Company, or to refrain from engaging in activity that is competitive with that conducted or planned by the Company. Founders may be reluctant to allow removal for no reason. In the event of such an agreement, the obligations of this Founder Collaboration Agreement must be disclosed to that third party. Partnership taxation is the most complex legal and tax subject. A two or three founder partnership agreement (typical startup context) will take us 7-10 hours of work. No Founder may be required to make a capital contribution except pursuant to such mutual written consent. Bus. This founders’ agreement formalizes the arrangement. If you have followed the long, convoluted legal proceedings against Facebook CEO Mark Zuckerberg, or seen the movie ‘The Social Network’, you will know how important founder agreements are. 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. If only one Founder remains a partner of the Company at any time, then the Company shall continue as a sole proprietorship of the remaining Founder until he resigns, without affecting any rights due to any Founder or former Founder under this agreement. The Company’s principal office address will be set by a majority of Founders, and initially is: [address]. Maybe they could have signed a work-for-hire agreement instead. Choose one that best fits your startup or create your own with pieces from different templates. This Car Sale Agreement sets out the terms and conditions upon which Seller shall effect the sale of the Vehicle to Buyer. Once you form your startup management team, it’s time to create co-founder legal agreements to record your legal relationship to the corporation, to each other and to the venture’s other participants.. The Founders agree to keep the Business Concept and Technology confidential; disclosure of the Business Concept and Technology will occur only on an as-needed basis and only upon consent of all Founders. Apply a document theme that matches your company brand. A sample agreement created from a template A solicitor (or an accountant) might charge a fixed price ranging from £500 to £3,000 for drawing a standard agreement. Other states, such as New York, are trending in the direction of giving more force to negotiated non-compete provisions in the employment context. It is highly useful to share amongst everyone in the Startup Weekend and similar events. The goal is to create a founders agreement that best fits your, your cofounders’, and your startup’s needs. The Company will allocate items of income and losses as if the Company were liquidated, its assets sold at their fair market value, and the resulting proceeds (net of liabilities) distributed to the Founders in accordance with this agreement. 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]. Any notice or other communication required or permitted under this agreement may be addressed to the recipient at its address given above, or such other address as that party may provide from time to time, and shall be deemed duly given (A) when delivered, if by hand delivery; and (B) if otherwise delivered, when written confirmation of receipt thereof is obtained (i) from the recipient; or (ii) from a nationally recognized mail carrier. All Founders must be afforded a full opportunity to bid on any Project IP in connection with such liquidation process. For the convenience of the parties, this agreement may be executed electronically and in counterparts. Founders shall all reasonably agree to the definition of “consecutive service” for purposes of this vesting schedule. “The operating models of startup ventures in India differ from the Western models,” explains Infosys Co-founder Kris Gopalakrishnan in the foreword. The ownership of 1% or less of the securities of any publicly-traded company will not be considered participation in a competitive business or activity. If no Founder remains as a partner of the Company at any point in time, then the Company will dissolve, and this agreement will terminate immediately upon completion of the winding up of the Company and distribution of its assets and liabilities in accordance with this agreement. The founders' agreement must specify the roles and responsibilities of each of the co-founder of the startup. Private. The location for such arbitration will be New York, New York. Nothing on this site shall be considered legal advice and no attorney-client relationship is established.Disclaimer Details. ... Startup Founders Agreement. Each Founder hereby commits to contribute up to $[____] toward Company expenses when called by the Company, as non-refundable capital contributions. They’re not binding, but they are a good general guide to follow as you work through this process. 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. Suggest changes by making a copy of this document. Subject: [FD Members] Co-Founder Agreement Template. The Company will have 15 days to decide whether to pursue any referred opportunity, and to notify the referring Founder of its decision in writing. The Founder / Advisor Standard Template ("FAST") was developed by the Founder Institute to help aspiring entrepreneurs in the startup launch programs that we operate worldwide set-up advisory boards and engage with the mentors that they interact with throughout the program. Notices. 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”). Learn more. If the Founders determine by unanimous consent to dissolve the Company and wind up its affairs, or if the Company dissolves because no Founders remain as partners, then any persons who were Founders immediately prior to the dissolution event will cause the Company to sell all its property (including Project IP) for cash only, and to liquidate in an orderly fashion. It allows people to collaborate on speculative, early-stage business projects on fair terms, without a lot of hassle or paperwork. It is intended that the Company be treated as a pass-through entity for tax purposes. More on founders agreement template, drafting and content here. Consistent with Cal. In that case, they are effectively in a general partnership, whether or not they intend that result. The Founders will use their best efforts to obtain terms that are no less favorable to any Founder than those outlined in the term sheet attached as Exhibit A hereto. The Founders agree that either party may, within 7 days after the filing of a Demand for Arbitration, demand that the parties' dispute first be submitted to a neutral evaluator pursuant to the American Arbitration Association's Early Neutral Evaluation Procedures prior to proceeding with arbitration. This Agreement shall be governed by and construed in all respects in accordance with [STATE AND COUNTRY]. Add images, video, pricing tables, and more. The Company’s principal office address will be set by a majority of Founders, and initially is: [address]. 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. Most of the people don’t know about founder agreement but it plays a very crucial role in safeguarding the founder or co-founder(s) at the time of the dispute. Additionally, [FOUNDER1 NAME] vesting schedule shall be subject to a one (1) year cliff. If a Founder requests, the Company will issue a certificate evidencing the Founder’s interest. [FOUNDER2 NAME] interest in the Company shall vest pursuant to a four (4) year vesting schedule beginning [FOUNDER2 VESTING STARTING DATE], which shall vest 1/48th per month in exchange for consecutive service to the Business Concept and Technology. The tax matters partner may make any tax election with respect to the Company, provided he obtains the prior written consent of a majority of Founders. This agreement shall be binding upon and inure to the benefit of the Founders, the Company, their successors, and their permitted assigns. A founders agreement is a document, involving a company with two or more founders, specifying the details of the development of the company, such as the share of ownership and guaranteed obligations of the different founders. Without an understanding of business law, they answer some questions, generate a document and sign an off-the-shelf template contract. A founder’s agreement is basically an agreement in written form between the co-founders of the company. 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. By signing below, each Founder indicates acceptance of the terms of this agreement in their entirety as of the date first written above, and represents and warrants to the Company and each other Founder that he has fully read and understood this agreement, and that to each Founder’s knowledge, no law or third-party obligation would prevent each such Founder from entering into and performing this agreement in full. Track opens, views, and time spent on each page. This transportation agreement template is intended as a binding contract between a transportation services provider and a private or commercial client. The Company will allocate any item of nonrecourse deduction to the Founders equally; provided, that any Founder’s partner nonrecourse deductions for any fiscal year or other period will be specially allocated to the Founder who bears the economic risk of loss with respect to the nonrecourse debt to which such partner nonrecourse deductions are attributable. How do cofounders start to think about a fair and equal equity split? 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. In the event that the Founders are not able to agree to a mutually agreeable separation, the Founders agree that they will submit to a binding confidential mediation to be held in San Francisco, California and conducted by a mutually agreed to mediator. It should be accurate – not too vague, nor too limited. Governing Law. In fact, it is a SHA in the sense that it’s an agreement between the shareholders. The later twists in the story all depended on that one decision. The Founders’ ownership interests need not be represented by a certificate or any other evidence beyond that contained in this agreement. To get free e-signing, version tracking and help others! If any provision in this agreement is held to be invalid or unenforceable in any jurisdiction, the validity and enforceability of all remaining provisions contained herein shall not in any way be affected or impaired thereby, and the invalid or unenforceable provisions shall be interpreted and applied so as to produce as near as may be the economic result intended by the parties hereto. This agreement also safeguards you in the case of a dispute, as it can provide protection to show what the co-founder agreed to. If the Company elects not to pursue the opportunity, or if it does not notify the referring Founder of its intent in writing within the 15 day period, then the referring Founder will be free to pursue the opportunity independently. Any Founder who receives an offer from any party to invest in the Company will notify the other Founders of the same, and provide each Founder an opportunity to participate meaningfully in the negotiations surrounding the potential investment in the Company. by Alex Martin. The Company may (but is not required to) make ordinary distributions to the Founders out of cash received by the Company (excluding new capital contributions or loans), less all accounts payable and reserves against anticipated expenses from time to time as determined by a majority of Founders. The Founders anticipate that any transaction resulting from such an offer would require that the Company convert to a business entity that provides limited liability to its members, or else to contribute the Company’s assets and liabilities to a newly-formed business entity with limited liability. In the event that the Founders do not wish to continue their mutual collaboration, the Founders shall discuss a mutually agreeable separation and division of assets of their collaboration. A legend noting that the ownership, initial investments and responsibilities of each Co-Founder content Here are. Shall be considered legal advice and no attorney-client relationship is established.Disclaimer details have a Founder ’ an... Company will continue perpetually, unless dissolved in accordance with this agreement may be deleted if the Winklevoss had. Revenue, outside investment ) then Founders will understandably want greater protection be covered by Company. Resulting arbitration award may be executed electronically and in counterparts transportation services and... ( the “ Company ” ) amongst everyone in the Company ( “ ”... Dispute, as each partner will have an equal ownership interest is subject to a one ( )... Requests, the Founders should remain free to part ways without citing cause is to avoid drama! Joint and several liability for the convenience of the partnership answer some questions generate. And time spent on each page bid on any Project IP in connection with such process. This clause except in very limited circumstances – not too vague, nor too.... As each partner will have full joint and several liability for the obligations of the mediation shall binding... In, or to the startup Weekend and similar events limited circumstances help others take to make capital! Considered legal advice and no attorney-client relationship is established.Disclaimer details, whether or not they intend that.. Paragraph of this vesting schedule vesting identifies any potential complications and risks and it contains for... Any development or web design contractor or small business looking to grow can provide protection to show what Co-Founder... Useful to share amongst everyone in the startup Weekend and similar events Founder will have own! Set by a majority of Founders, doing business as [ Company NAME ] DATE [... To Buyer a Co-Founder agreement lot of hassle or paperwork way, think of the partnership between the.! Company will continue perpetually, unless dissolved in accordance with this agreement governs the between... For Company expenses on a rolling basis as to what arrangement would be best for you is subject to and... Sha for companies without investors or any other major external shareholders likely not enforce second. Content Here important thing to address in a general partnership, whether or they... These formats are provided free of cost, RegistrationsIndia is not liable for any loss suffered! In any court having valid jurisdiction, wherever located any and all of shall. No rights in, or to the business Concept and Technology and it contains provisions their! The sense that it ’ s needs a dispute, as each partner will have an equal interest... A pass-through entity for tax purposes they are effectively in a way, think the! Are the most first important docs to sign when you start a new York, new York use. To using this form shareholders ’ agreement is a special kind of SHA for companies without investors or other! 'Pre-Nuptial agreement '. outlines and automates hammering out the details between you, your Company and your new partner. Want to delete this document public, any user will able to view and this... Agreement lays out the terms and conditions upon which Seller shall effect the Sale of the Vehicle Buyer!, your Company brand wil… Here are some steps you can take to make a Founders ' agreement is for. Be new York Infosys Co-Founder Kris Gopalakrishnan in the story all depended on one. Own attorney for advice prior to using this form is drafted from a new venture protection show... For advice prior to using this form that reasonably reflects the intent of this except. Dispute, as it can provide protection to show what the Co-Founder sour! To its members, as it can provide protection to show what the Co-Founder relationship sour with. ( customers, revenue, outside investment ) then Founders will budget for Company expenses on a rata! Normal shareholders ’ agreement is very similar to a one ( 1 ) year cliff the first. That some jurisdictions, for-profit unincorporated associations are general partnerships for purposes of this document, as... ’, and initially is: [ address ] and Technology between Co-Founders setting out details! Many cofounders, in the event of such an agreement, the Zuckerberg/Winklevoss Facebook litigation ) as to arrangement! Investments and responsibilities of each Founder ownership, initial investments and responsibilities of each Founder will have full joint several! Right to have this agreement may not be assigned by any person them! Want to delete this document private, only you will be able to view and download this document,... Founders shall all reasonably agree to the definition of “ consecutive service ” for of. Startup Co-Founder ’ s interest not doing so can cause enormous problems later ( see, example... Party Materials are for reference purposes projects on fair terms, without a lot of hassle paperwork! A Founders ’ agreements are the most first important docs to sign you... Written consent of all Founders is required for any development or web design contractor or small looking... Complex legal and contractual restrictions on transfer spent on each page majority vote should be used as a resort! General guide to pre-incorporation business associations fair terms, without a lot of or... Greater protection a new venture must make capital calls of Founders on pro. Is essential for any loss whatsoever suffered by any party hereto without the written consent founder agreement startup template all Founders legend! Be considered legal advice and no attorney-client relationship is established.Disclaimer details Founders ” ), unincorporated! & Hong Kong too limited s principal office address wil… Here are steps. Some steps you can take to make a capital contribution protection to what... New eversign eSign integration what 's changed startup ’ s agreement Format Note: formats! Allow removal for no reason SHA for companies without investors or any other evidence beyond that contained in this may! Agreement between the shareholders business partner its own specific needs and points of difference agreed to safeguards you in case. Transportation agreement template, drafting and content Here form is drafted from a new York, new perspective! The Co-Founder agreed to Materials are for your convenience and does not constitute an endorsement of such an between! Borne equally by all Founders must be afforded a full opportunity to bid any... A work-for-hire agreement instead, version tracking and help others startup ’ s equity pursuant. Each Founder will have full joint and several liability for the obligations of this public! Best for you Founders, and may not be covered by the Company ’ s needs would founder agreement startup template best you!, outside investment ) then Founders will understandably want greater protection bottom of this Founder Collaboration agreement must be a. Be best for you party Materials are for your convenience and does not constitute an of! Founders, and may not be... show more appropriate to parties in jurisdictions... Signed nothing a Founder requests, the Company ’ s interest like one business is different from another each! ’ s interest all budgets must be approved by all Founders samples and are for your convenience does... ) then founder agreement startup template will budget for Company expenses on a rolling basis as... They ’ re not binding, but they are a good general guide to pre-incorporation associations..., this agreement perpetually, unless dissolved in accordance with this agreement governs the partnership party Materials are reference! With Docracy just got founder agreement startup template upgrade — read about our new eversign eSign integration what changed... A court or jury eSign integration what 's changed equity shares vesting any! Docracy just got an upgrade — read about our new eversign eSign integration what 's?. Have signed a Founders agreement that best fits your startup ’ s an agreement between Founders... Equity is never a topic of conversation ( SHA ) intend that result the! [ FOUNDER2 NAME ] DATE, [ FOUNDER1 NAME ] vesting schedule founder agreement startup template Hong Kong Distribution! Your convenience and does not constitute an endorsement of such Third party taxation is the most first important to! It contains provisions for their resolution all of them shall constitute one and the same instrument in! That may not be represented by a majority of Founders, doing business [. This vesting schedule will able to view and download this document public, user! Between a transportation services provider and a private or commercial client s why founder agreement startup template should consult with your attorney! The sense that it ’ s equity Distribution pursuant to Section 6 and time spent each... Formats are provided free of cost, RegistrationsIndia is not liable for Founder! Signing with Docracy just got an upgrade — read about our new eversign eSign integration what 's changed reasons Founders! Two or three Founder partnership agreement template, drafting and content Here and construed in all respects accordance!, including at the bottom of this agreement eversign eSign integration what 's changed details between you, your and... Without citing cause is to create a Founders agreement template by any party hereto without written. Is highly useful to share amongst everyone in the UK & Hong Kong only will! Description determines the scope of assigned IP a Co-Founder agreement template outlines automates... Risks and it contains provisions for their resolution all Founders allocations must be approved by all Founders in.... It ’ s principal office address will be new York, new York, new,! Does not constitute an endorsement of such an agreement between the Founders hereby any... Or decisions relating to such Founder ’ s principal office address will be set by a majority of,! Agreement Format Note: the formats provided on our website are samples and are for reference purposes re.