Founders Agreement Template
Also searched as: Co-Founder Agreement Template · Founder Equity Agreement · Startup Founders Agreement
A founders agreement sets the terms between co-founders before or shortly after incorporation — equity split, vesting, roles, and what happens if someone leaves. It is the document that prevents the most damaging category of startup dispute: an unequal or unclear split discovered only after the company has value.
A downloadable template is written for a hypothetical deal, and usually protects whoever wrote it. The clause structure below is genuinely universal — but the terms that matter (what’s excluded, who owns what, what the cap is) depend entirely on your situation. This page gives you the structure and the decisions; the guided draft turns your answers into a document built for your deal.
What a founders agreement must contain
These are the sections our lawyers review on every founders agreement. A document missing any of them has a gap worth closing before signature.
Founders agreements should reflect your company’s specific equity structure, corporate form, and jurisdiction of incorporation. This guide reflects the clause structure our lawyers review on every founders agreement; the specific terms for your company are settled during drafting, not fixed in advance.
Decisions you need to make first
- 1Is equity vested, or fully allocated on day one?
Unvested equity fully allocated at incorporation means a founder who leaves in month two keeps the same stake as one who stays for years — vesting protects the company and the remaining founders.
- 2What counts as a “good leaver” versus a “bad leaver”?
This decides how much unvested (and sometimes vested) equity a departing founder keeps — and it needs defining before anyone actually leaves, not during the dispute.
- 3How is deadlock between founders resolved?
Without a defined mechanism, a 50/50 disagreement on a critical decision can stall the company indefinitely.
- 4Is IP created by each founder assigned to the company?
Without express assignment, a founder’s pre-existing or side-created IP can remain personally owned rather than company property.
- 5What is the buy-back mechanism and valuation method on exit?
Deciding the formula in advance avoids a valuation fight exactly when a founder relationship is already strained.
Mistakes we see most often
- No vesting schedule, so equity is fully allocated regardless of how long someone actually stays
- No good-leaver/bad-leaver distinction defined before it’s needed
- No deadlock-resolution mechanism for an even-numbered founding team
- IP created by founders before incorporation never formally assigned to the company
- Roles and decision rights left informal, surfacing only when founders disagree
Clauses worth understanding first
Build it around your deal, not someone else’s.
Answer a short set of questions and get a document written for your terms — then have a lawyer review it before you sign.
Lawyer-drafted, plan or one-off from ₹4,999 · 24–48 hour turnaround
Other contract guides
This guide is general information about contract structure, not legal advice. What your agreement should say depends on your specific circumstances and the law that governs it.
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