Founders’ Agreement

Founders’ Agreement Overview

It is important for a company’s founders to have an agreement among themselves even before creating an entity. Founders’ agreements are the product of conversations that should take place among a company’s founders at the early stages of formation rather than later in the life of a company

The goal of these conversations is to have an open and honest discussion about the attitudes, fears, and aspirations of individuals involved with the startup, so as to minimize the l

1 A Conversation Guide. Answering these hard questions now will help you and your co-founders avoid personal conflicts in the future.

A Model Founders’ Agreement. A Founders’ Agreement is a contract that a company’s founders enter into that governs their business relationships. The Agreement lays out the rights, responsibilities, liabilities, and obligations of each founder. Generally speaking, it regulates matters that may not be covered by the company’s operating agreement. Ultimately, Founders’ Agreements are designed to protect each founder’s interests and memorialize that all founders are in agreement about the venture’s basic structure and how the founders will work together to move their business forward. Forging an agreement between all founders helps mitigate the risk of a lawsuit over who owns the business.

There is a wide range of provisions that could be addressed in a Founders’ Agreement. The template below includes provisions about:

transfer of ownership;
 ownership structure;
 confidentiality;
 decision-making and dispute resolution;
 representations and warranties; and
 choice of law.

These are essential provisions that are commonly seen in Founders’ Agreements. Annotations explaining all of the provisions in the document are at the end of the agreement. The first four pages of the document are the template agreement. The rest of the pages contain helpful explanatory annotations which refer to provisions within the document itself

Founders’ Collaboration Agreement

The undersigned (each a “Founder” and together the “Founders”) are collaborating with the purpose of developing together a Business Concept.

A Business Concept is an idea for a business that includes the service, product, or invention, the target demographic, and a unique selling proposition that gives a company an advantage over competitors. The Business Concept also includes the related technology and intellectual property that is used to create, implement, develop, or perfect the idea. A Business Concept may involve a new product or service or different approach to marketing or delivering an existing product or service.

In connection with creating the Business Concept, and in consideration for a mutually agreeable framework which will serve as the foundation for the Founders to successfully develop the Business Concept, the undersigned hereby agree as follows: